required: logan company received from furniture.com an invoice dated september 29. terms were $\frac{1}{10}$…
required: logan company received from furniture.com an invoice dated september 29. terms were $\frac{1}{10}$ eom. list price on the invoice was $8,000 (freight not included). logan receives an $\frac{8}{7}$ chain discount. freight charges are logans responsibility, but furniture.com agreed to prepay the $300 freight. logan pays the invoice on november 7. what does logan company pay furniture.com? note: round your answer to the nearest cent. logan company pays
Answer
Explanation:
Step1: Calculate the net - price after chain discount
The complement of the first discount fraction $\frac{8}{7}$ is $1-\frac{8}{7}=-\frac{1}{7}$, which is incorrect. I assume you mean an $8/10$ and $7/10$ chain - discount. The net - price factor for a chain discount of $d_1$ and $d_2$ is $(1 - d_1)(1 - d_2)$. Here, $d_1=\frac{8}{10}=0.8$ and $d_2 = \frac{7}{10}=0.7$. The net - price factor $N=(1 - 0.8)(1 - 0.7)=0.2\times0.3 = 0.06$. The list price $L = 8000$. The net price $P_{net}=L\times N=8000\times0.06 = 480$.
Step2: Consider the freight charges
Furniture.com prepaid the $300$ freight, and Logan is responsible for it. So the total amount Logan pays is the net price of the goods plus the freight charge. The total amount $A=P_{net}+300$. $A = 480+300=780$.
Answer:
$780.00$