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What amount must be remitted if invoices dated July 25 for $905, August 10 for $767 and...

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googlename | eNotes Newbie

Posted November 5, 2013 at 4:29 PM via web

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What amount must be remitted if invoices dated July 25 for $905, August 10 for $767 and August 29 for $939, all terms 2/15 E.O.M., are paid together on September 12?

Round your final answer properly to two decimal places.

$  ____________ 

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llltkl | College Teacher | (Level 3) Valedictorian

Posted November 5, 2013 at 5:18 PM (Answer #1)

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2/15 EOM means 2% discount if the bill is paid within 15 days after the end of the month in which the invoice is issued. When EOM dating is used, it is common to grant a one month extension on invoices dated on or after the 26 th of the month. The invoice dated Aug 29 is considered to be dated Sep 1 so the cash discount may be taken for 15 days after the end of September or until October 15.

All invoices has 2/15 E.O.M terms. Payment is being made on Sep. 12.

Date of invoice   Net price   Last date   Discount ($)       Cash price

--------------------   -------------   ------------  ------------  -----------

Jul. 25                  $905               Aug. 15        0.00           $905.00

Aug. 10                $767               Sep. 15        15.34          $751.66

Aug. 29                $939               Oct.15         18.78           $920.22

---------------------------------------------------------------------------------------------------------

Total amount to be remitted on Sep. 12                        = $2576.88

Therefore, total amount to be remitted on Sep. 12 is $2576.88.

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