Question

On April 30 Henry's hardware decides to pay half of its obligation on an invoice for $2,000. If the invoice is dated April 20 and carries terms of 2/10,1/15,n/30(a) how much should the store remit? (b) On may 5, the store pays the remainder of the invoice. How much is remitted? (c) what is the total amount that was paid?

Answer 1

The terms 2/10,1/15,n/30 mean that a discount of 2 % is available if paid within 10 days and a discount of 1 % is available if paid within 15 days. Also, the net amount is due within 30 days after the sales invoice date.

Here, on April, 30, Henry's hardware (buyer) decides to pay half of its obligation on an invoice dated April 20 for $2,000. Since a sum of $ 1000 is paid within 10 days, a discount of 2 % on $ 1000 i.e. $ 20 is available to Henry's hardware. The balance amount i.e. $ 2000-$ 1000-$ 20 = $ 980 is payable by 30^th May.

(a). A sum of $ 1000 is remitted on April, 30.

(b). On May, 5, the store pays the remainder of the invoice i.e. $ 980 is remitted.

(c ). The total amount paid is $ 1000+$ 980 = $ 1980.