Cash Discount Review, Tu 41400 Chapter 8 and Distribution Finance Handy Rule: "30 days hath September. April June and November all the others have 31 expect February which has 28 and sometimes 29" (author unknown) 1. Calculate the cash discount offered and the amount paid as stated in the problems below: Item Invoice Amount Invoice Date Discount terms Date Pald Amount Pald a $1,790 1/10, n/30 3/1 3/10 $1,772.10 b. $7,194 2/10, n/30 3/28 4/17 $7,050 2. A distributor is invoiced for $58,000 with discounts of 2/10,n/30, on July 28. The bill is paid on August 8". How much should be paid? $8.000 3. A distributor purchased grinding wheels and was invoiced for $2,303.28 with terms of 2/10, 1-1/2, 20. n/30. The invoice was dated May 22 and payment was made on June 2ed. What is the net amount of the payment? 2.268.7 4. The Clark Distributors ship purchased electronic components and received an invoice for $7,800 on October 21" with terms of 3/10, 2/30, n/60. They paid the full amount of the bill less the discount on November 1" a. What was the amount of the discount in dollars? $150 b. What should be the amount paid? $7.644 c. If payment is made October 31", what discount can be taken? $234 5. The Ace Distribution Corporation buys 10 monitors at a list price of $150 each of May 4". They are offered discounts of 18% and 22% from the manufacturer with terms of 3/10, n/30. a. What amount should the distributor pay on May 14"? b. What single multiplier could be used to calculate the invoice price? c. If the interest rate is 11% (annual rate) and the loan can be repaid in 45 days, how much money with the distributor save on the purchase by borrowing the money and taking the discount? 6. A distributor purchased a pallet of threaded fasteners which listed for $52,021 and carried trade discounts of 11%, 7%, and 1%. They were invoiced on January 26 and offered cash discounts of 2-1/2/10, 1/30. a. How much was the invoice? b. How much should they pay on 2/26? C Should they borrow the money and take the maximum cash discount if the interest rate is 1-1/2% per month and bean can be repaid in 75 days