Question
Part 1 (8 points): List four procedures that a business should use to control its cash payments. Part 2 (9 points): Determine the due dates
Part 1 (8 points): List four procedures that a business should use to control its cash payments. Part 2 (9 points): Determine the due dates and discount amount for the following example: A software company frequently purchases merchandise on account. When it receives an invoice, a clerk puts a processing stamp on the invoice indicating the due date, the amount of any discount, and the amount to be paid. The following invoices were received during March:
S. No | Invoice Number | Invoice Date | Credit Terms | Invoice Amounts |
1. | 2456 | January 5 | 2/10, n/30 | $3,000.00 |
2. | 7895 | January 7 | 3/10, n/30 | $5,500.00 |
3. | 6785 | January 12 | 2/15, n/60 | $729.95 |
4. | 7859 | January 23 | 2/10, n/30 | $1,526.50 |
Instructions: The first invoice has been completed as an example. Prepare a form similar to the one that follows using your spreadsheet software. For each invoice do the following:
- Determine the due date. Assume that the software company always pays invoices within the discount period.
- Calculate the discount amount, if any.
- Calculate the amount to be paid.
- Calculate the amount the software company will save by taking advantage of all discounts.
Invoice Number | Invoice Date | Credit Terms | Invoice Amount | Due Date | Discount Amount | Amount to be Paid |
2456 | Jan 5 | 2/10. n/30 | $3,000.00 | Jan 15 | $60.00 | $2,940.00 |
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