Backyard World buys plastic pools from a supplier with an invoice amount of $19,500. The terms of the sale are 5/10, n/30. If the retailer sends a partial payment of $8,700 on the discount date, what is the net amount still due?

Question

Quizplus · Accepted Answer

The discount is 5% of $8,700, which is $435. So, the payment is $8,700 - $435 = $8,265. The original invoice is $19,500, so the net amount still due is $19,500 - $8,265 = $11,235. However, since the payment took advantage of the discount, the correct calculation for the remaining balance should consider the discount on the entire invoice if paid within the discount period. The correct approach is to calculate the discount on the full invoice amount first, then subtract the partial payment made. The discount on the full invoice is 5% of $19,500, which is $975. Therefore, the discounted invoice amount is $19,500 - $975 = $18,525. After the partial payment of $8,700, the net amount still due is $18,525 - $8,700 = $9,825. My initial explanation contained a calculation error; the correct calculation should directly address the discount terms and the partial payment without incorrectly subtracting the discount from the partial payment alone.

Backyard World Buys Plastic Pools from a Supplier with an Invoice