An invoice for a laptop computer that cost $625.68 is dated September 15, with sales terms of 3 / 10 EOM. If the bill is paid October 8, find the cash discount and net amount paid.

Question

Quizplus · Accepted Answer

First, we need to determine the discount amount. The sales terms of 3/10 EOM means that there is a 3% discount if the bill is paid within 10 days of the end of the month (in this case, September). October 1 would be the last day to receive the discount, but since the bill was paid on October 8, the discount is not for the full 3%. Instead, we need to calculate how many days late the payment was:

October 8 (payment date) - September 30 (last day for discount) = 8 days

So the discount would be for 3% * 625.68 = $18.77, rounded to two decimal places.

To find the net amount paid, we subtract the discount from the total cost:

625.68 - 18.77 = $606.91

Therefore, the correct answer is A: Cash discount: $18.77; net amount: $ $606.91.

An Invoice for a Laptop Computer That Cost $625