A retailer purchases merchandise with a catalog list price of $30,000. The retailer receives a 15% trade discount and has credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?

Question

Quizplus · Accepted Answer

Catalog list price = $30,000
Trade discount = 15%, so the net cost is 85% of $30,000 = $25,500
Taking the discount of 2% on the net cost saves the retailer 2% of $25,500 = $510
Amount to be paid within the discount period = net cost - discount = $25,500 - $510 = $24,990. Answer D is correct.

A Retailer Purchases Merchandise with a Catalog List Price of $30,000