required: jordans of boston sold lee company of new york computer equipment with a $7,000 list price. sale…
required: jordans of boston sold lee company of new york computer equipment with a $7,000 list price. sale terms were $\frac{4}{10},\frac{n}{30}$ fob boston. jordans agreed to prepay the $400 freight. lee pays the invoice within the discount period. what does lee pay jordans? lee pays
Answer
Explanation:
Step1: Calculate discount amount
The discount rate is $\frac{1}{10}$ (10 - day discount period). The list - price of the computer equipment is $7000$. The discount amount is $7000\times\frac{1}{10}=700$.
Step2: Calculate net price of equipment
The net price of the equipment is the list price minus the discount amount, so $7000 - 700=6300$.
Step3: Add prepaid freight
Jordan's prepaid the $400$ freight. Lee has to reimburse Jordan's for the freight. So the total amount Lee pays is the net price of the equipment plus the prepaid freight, $6300 + 400=6700$.
Answer:
6700