Eli Company Eli Company sells novelty items and offers terms of 1/10,n/30 to credit customers.One customer,Faulkner,Inc. ,purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5,2013.
-Refer to the information provided for Eli Company.If the customer pays the amount of the invoice for its purchase on March 14,2013,how much cash will Eli Company receive?

Question

Quizplus · Accepted Answer

The total amount of the purchase by Faulkner, Inc. is $20 x 100 = $2000.
The terms of the sale are 1/10, n/30 which means that the customer can take a 1% discount if they pay within 10 days, otherwise the full amount is due in 30 days.
Since Faulkner, Inc. paid on March 14, 2013, which is 9 days after the purchase on March 5, 2013, they are eligible for the discount.
The discount is 1% of $2000, which is $20.
Therefore, the amount of cash that Eli Company will receive is $2000 - $20 = $1980
Therefore, the best choice is C.

Eli Company Eli Company Sells Novelty Items and Offers Terms