Question

Bally Manufacturing sent Intel Corporation an invoice for machinery with a $13,500 list price. Bally dated the invoice July 29 with 3/10 EOM terms. Intel receives a 20% trade discount. Intel pays the invoice on August 11. What does Intel pay Bally

Answer 1

Answer:

$10,584

Explanation:

Given

Cost of Machinery = $13,500

Trade Discount = 20%

Cash Discount = 2%

First, we Calculate the Net Price

Net Price = $13,500(100% - 20%)

Net Price = $13,500(80%)

Net Price = $13,500 * 0.8

Net Price = $10,800

Applying Cash discount;

Payment = $10,800(100% - 2%)

Payment = $10,800(98%)

Payment = $10,800 * 0.98

Payment = $10,584

Hence, Intel pays Bally $10,584