Due In 1 Hour: A Trading Company Purchased Video And Digital

Due In 1 Hour1 A Trading Company Purchased Video And Digital Cameras

Due in 1 hour 1. a trading company purchased video and digital cameras from a producer for its new store with a total of $137,229. The order has a trade discount of 28%. Use the net price to find the merchandise. The total net price is $?

2. a company manages an electronic equipment store and has ordered 100 remote-controlled color TVs for a special sale. The list price for each TV is $250 with a trade discount series of 5/8/2. Find the net price of the order by using the net decimal equivalent. The total net price is $?

3. one manufacturer is calculating the trade discount on a dog kennel with a list price of $295 and a trade discount series of 11/10/10. What is the trade discount? What is the net price for the kennel?

4. a television game device has a list price of $244 and a trade discount series of 13/15. Find the net price and trade discount. The net price is $? The trade discount is $?

5. a man received an invoice dated March 9, with terms 3/10, n30, amounting to $550. He paid the bill on March 12. How much was the cash discount?

6. a man gets an invoice for $450 with terms 2/10, 1/15, n30. How much would he pay 24 days after the invoice date?

7. an invoice for a camcorder that cost $1,270 is dated August 1, with sales terms of 2/10 EOM. If the bill is paid on September 5, how much is due?

8. an invoice for $200 is dated October 2, and has sales terms of 5/10 ROG. The merchandise arrives October 9. How much is due if the bill is paid October 14?

9. a machine shop received a shipment of goods from a distributor. The bill of lading was marked FOB-shipping. Who paid the freight? To whom was the freight paid?

Paper For Above instruction

Trade discounts and their impact on merchandise pricing is a fundamental aspect of business transactions, especially relevant in retail and manufacturing sectors. This paper explores various scenarios involving trade discounts, calculating net prices, and understanding payment terms, illustrating their practical applications in commercial settings.

Introduction

Trade discounts are reductions in the listed price of goods, given by sellers to buyers, often based on volume, customer loyalty, or promotional strategies. They are essential in pricing strategies, affecting the final amount a buyer pays. Calculating net price after trade discounts enables both parties to understand the actual cost and revenue involved. In this context, various methods such as decimal equivalents and series discounts are used to determine the net price and the total amount payable under different terms. This paper discusses multiple scenarios to clarify these concepts and their calculations.

Calculating Net Price with Trade Discount

Trade discounts are usually expressed as series or percentages. When given as a series, such as 5/8/2, the discount applies sequentially to the successive reduced prices rather than summing the percentages. The net decimal equivalent simplifies calculations by converting the discount series into a single decimal factor, which can be multiplied directly by the original price to obtain the net price.

Scenario 1: Purchasing Video and Digital Cameras

In the case of the trading company, the total purchase amount is $137,229 with a trade discount of 28%. To determine the net price, the discount percentage must be applied to the total amount. The calculation involves subtracting 28% from 100%, which leaves 72% of the original price. Converting this to a decimal (0.72), the net price is calculated as:

Net Price = Total Price × (1 - Discount Rate) = $137,229 × 0.72 = $98,839.68

Thus, the merchandise's net price is approximately $98,839.68.

Scenario 2: Ordering Remote-Controlled Color TVs

With a list price of $250 per TV, and a discount series of 5/8/2, the net price per unit is determined by converting the series into a decimal equivalent. This series implies successive discounts of 5%, then 8%, then 2%. The decimal equivalent is calculated as:

Net Decimal = 1 - (Series product of discounts) = 1 - (0.05 × 0.08 × 0.02) = 1 - 0.0008 = 0.9992

Alternatively, for more precise calculation, the total series discount is applied sequentially, reducing the original price step by step, then compiling the total.

Calculating step by step:

  • First discount: $250 × 5% = $12.50; New price: $250 - $12.50 = $237.50
  • Second discount: $237.50 × 8% = $19.00; New price: $237.50 - $19.00 = $218.50
  • Third discount: $218.50 × 2% = $4.37; Final net price: $218.50 - $4.37 = $214.13

For 100 units, total net price= $214.13 × 100 = $21,413.

Scenario 3: Trade Discount on a Dog Kennel

List price: $295; Trade discount series: 11/10/10.

Sequential discount calculations:

  • Discount 1: $295 × 11% = $32.45; Price after first discount: $262.55
  • Discount 2: $262.55 × 10% = $26.25; Price after second discount: $236.30
  • Discount 3: $236.30 × 10% = $23.63; Final net price: $212.67

Total trade discount: Sum of individual discounts: $32.45 + $26.25 + $23.63 = $82.33.

Net price: $212.67

Scenario 4: Television Game Device

List price: $244; Trade discounts series: 13/15.

  • First discount: $244 × 13% = $31.72; Price after first discount: $212.28
  • Second discount: $212.28 × 15% = $31.84; Final net price: $180.44

The total trade discount: $31.72 + $31.84 = $63.56

Net price: $180.44

Scenario 5: Invoice Payment with Terms 3/10, n30

The invoice amount: $550; Terms: 3/10, n30. The discount applies if paid within 10 days. Since the payment is made on March 12, two days after the due date, the discount is not applicable. Therefore, the payment amount remains $550. The cash discount: $0.

Scenario 6: Payment 24 Days After Invoice

Invoice for $450 with terms 2/10, 1/15, n30. Since the payment occurs 24 days after the invoice date, neither discount period applies, thus the full amount of $450 is payable.

Scenario 7: Payment for a Camcorder

List price: $1,270; Terms: 2/10 EOM (End of Month). The invoice date is August 1, and payment on September 5. Since September 5 is approximately 35 days from August 1, and the discount applies only if paid within 10 days of the end of the month, the discount is not applicable. Total due: $1,270.

Scenario 8: Invoice Paid After the Due Date

Amount: $200; Date: October 2; Terms: 5/10 ROG (Receipt of Goods). The merchandise arrives on October 9. Payment is due within 10 days of receipt, i.e., by October 19. Paid October 14, within the discount period, so the discount applies.

Discount: 5% of $200 = $10; Final amount payable: $190.

Scenario 9: FOB-Shipment Freight Payment

When a shipment's bill of lading is marked FOB-shipping (Free On Board), the seller pays for shipping until shipment is picked up, and buyer pays from that point onward. Typically, the buyer pays freight charges once the goods are shipped, as the FOB-shipping term indicates the responsibility transfers at the shipping point. The freight is paid by the buyer to the shipping carrier.

Conclusion

Understanding trade discounts, series discounts, and payment terms is vital for accurate pricing and cash flow management in business. Calculations involving series discounts require sequential application of percentage reductions, while decimal equivalence offers a simpler method for quick estimations. Payment timing significantly influences whether discounts are applicable, impacting the final payable amount. Proper comprehension of FOB terms clarifies responsibilities regarding freight costs, essential for negotiating and managing supply chain logistics effectively.

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