For a $200,000 trade payable with terms of 2/15,net 50,how much would be reported as "purchase discount lost" under the net method if a payment was made after 60 days?
A)$0
B)$4,000
C)$5,000
D)$30,000

Question

Quizplus · Accepted Answer

Under the net method, the discount period is ignored and the full amount is due in 50 days. If a payment is made after 50 days but before 60 days, no discount is lost, so the purchase discount lost is $0. If a payment is made after 60 days, the buyer has missed the deadline for payment and is not entitled to any discount. Therefore, the full amount of $200,000 is due and the purchase discount lost is $4,000 (2% of $200,000).

For a $200,000 Trade Payable with Terms of 2/15,net 50,how