Question

"on sept. 1, jerry's lighting purchased merchandise with a list price of $12,500 with credit terms of 3/10, n/30; freight of $400 prepaid and added to the invoice. on sept. 3, jerry's returns $1,300 of the merchandise. if payment is made within the discount period, the total amount paid by jerry's lighting is:"

Answer 1

Jerry's Lighting would pay a total of $11,252 if they make a payment within the discount period after deducting the value of returned merchandise, adding the freight charge, and applying the 3% discount.

Step-by-step explanation:

Jerry's Lighting purchased merchandise with a list price of $12,500 and was offered a cash discount of 3% if paid within 10 days, with the full amount due in 30 days (credit terms of 3/10, n/30). Additionally, freight charges of $400 were prepaid and added to the invoice. Shortly after, Jerry's Lighting returned merchandise worth $1,300.

Firstly, we subtract the returned merchandise value from the original list price:

$12,500 - $1,300 = $11,200 (Adjusted merchandise value)

Next, the freight charge is added to the adjusted merchandise value to get the total invoice amount:

$11,200 + $400 = $11,600

If Jerry's Lighting pays within the discount period, they can take advantage of the 3% discount. Hence, we calculate the discount on the adjusted invoice amount:

3% of $11,600 = 0.03 * $11,600 = $348

The total amount paid by Jerry's Lighting after the discount would be:

$11,600 - $348 = $11,252

Therefore, if payment is made within the discount period, the total amount paid by Jerry's Lighting is $11,252.