Eriez Magnetics purchased goods with a purchase price of $10,000 and credit terms of 3/10 net 40. The firm paid for these goods on the 5th day after the date of sale. The firm must pay ________ for the goods.

Question

Quizplus · Accepted Answer

The credit terms 3/10 net 40 mean a 3% discount is available if paid within 10 days. Since Eriez Magnetics paid on the 5th day, they are eligible for the discount. The discount is 3% of $10,000, which is $300. Therefore, the firm pays $10,000 - $300 = $9,700.

Eriez Magnetics Purchased Goods with a Purchase Price of $10,000