required: majestic manufacturing sold jordans furniture a living room set for an $8,520 list price with 25%…

required: majestic manufacturing sold jordans furniture a living room set for an $8,520 list price with 25% trade discount. the $110 freight (fob shipping point) was not part of the list price. terms were $\frac{2}{10},\frac{n}{30}$ rog. the invoice date was june 01. jordans received the goods on july 20 and paid the invoice on july 22. what was the final price (include cost of freight) of the living room set? note: round your answer to the nearest cent. final price

required: majestic manufacturing sold jordans furniture a living room set for an $8,520 list price with 25% trade discount. the $110 freight (fob shipping point) was not part of the list price. terms were $\frac{2}{10},\frac{n}{30}$ rog. the invoice date was june 01. jordans received the goods on july 20 and paid the invoice on july 22. what was the final price (include cost of freight) of the living room set? note: round your answer to the nearest cent. final price

Answer

Explanation:

Step1: Calculate trade - discounted price

The list price is $8520$ and the trade - discount rate is $25%$ or $0.25$. The trade - discounted price of the furniture (excluding freight) is calculated as the list price times $(1 - \text{trade - discount rate})$. So, $8520\times(1 - 0.25)=8520\times0.75 = 6390$.

Step2: Add freight cost

The freight cost is $110$. The terms $\frac{2}{10},\frac{n}{30}$ ROG (Receipt of Goods) mean that a $2%$ discount is available if paid within 10 days of receiving the goods. Jordans received the goods on July 20 and paid on July 22, which is within 10 days of receiving the goods. But the freight is not subject to the trade - discount or the cash - discount. The final price of the living - room set (including freight) is the trade - discounted price of the furniture plus the freight cost. Since there is no cash - discount on freight and we are calculating the total cost, the final price is $6390+110=6500$.

Answer:

$6500.00$