Jud-Jo Distributors received an invoice dated September 22 in the amount of $97.50. The credit terms were 2 / 15, N / 30. A penalty of 6% is imposed for payments made after 30 days. Jud-Jo made a partial payment on October 6 of $50.00 and paid the balance on October 25. What was the amount due?

Question

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First, we need to calculate the discounted amount for making the payment within 15 days.
2% of $97.50 = $1.95
Amount due within 15 days = $97.50 - $1.95 = $95.55

Jud-Jo made a partial payment of $50 on October 6, which means they still owed $45.55 to the supplier. Since this payment was not made within 15 days, they do not get the 2% discount.

According to the credit terms, the full payment should have been made within 30 days of the invoice date, which was on September 22. Therefore, a penalty of 6% is imposed on the outstanding balance after 30 days.
6% of $45.55 = $2.73

Amount due after penalty = $45.55 + $2.73 = $48.28

Therefore, the amount due to the supplier was $48.28. However, we need to round this answer to the nearest cent, which would be $49.27 (since the decimal place is in the hundredth position and the digit in the next place is greater than or equal to 5).

Jud-Jo Distributors Received an Invoice Dated September 22 in the Amount