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Homework answers / question archive / A client purchased $100,000 of merchandise on credit from Bob the Builder Limited on July 7, 2020
A client purchased $100,000 of merchandise on credit from Bob the Builder Limited on July 7, 2020. The credit terms were 3/15, n/30. On July 8, 2020 the client returned half of the inventory saying there were problems. On July 11, 2020 the client paid half the outstanding accounts receivable balance. On July 29, 2020 the client paid the remaining balance outstanding. What is the total sales discount did Bob the Builder Limited record? Select one: a. $3,000.00 b. $6,000.00 c. $1,500.00 d. $0.00
Option c) is correct, $ 1,500,
Explanation-
The given pharse means that the buyer will be awarded a discount of 3%,if such buyer is paying the amount due within the period of 15 days from the date of invoice.
In the given case the amount due is $ 50,000 (after adjusting return of $ 50,000),which have been paid within the period of 15 days from the date of discount,hence the buyer will be awarded a discount of 3%, i.e $1,500 (50000*3%)
Hence option c) is correct,
