Question

Majestic Manufacturing sold Jordans Furniture a living room set for an $8,740 list price with 35% trade discount. The $220 freight (FOB shipping point) was not part of the list price. Terms were 4/10, n/30 ROG. The invoice date was June 23. Jordans received the goods on August 11 and paid the invoice on August 13. What was the final price (include cost of freight) of the living room set? (Round your answer to the nearest cent.)

Answer 1

Terms were 4/10, n/30 ROG which denotes 4% discount if paid within 10 days and net due within 30 days from Reciept of Goods (ROG).

Since Jordans received the goods on August 11 and paid the invoice on August 13 within 10 days of ROG, Cash discount is available to jordan.

Final price (include cost of freight) of the living room set = (List Price - Trade Discount)*(1-cash discount%) + freight

Final price (include cost of freight) of the living room set = (8740 - 35%*8740)*(1-4%) + 220

Final price (include cost of freight) of the living room set = 5673.76