The document contains a series of word problems related to calculating discounts, trade discounts, net prices, and other accounting concepts. The problems require calculating values like cash discounts, trade discounts, net prices, discount dates, and more based on given invoice amounts, list prices, discount rates, and other transaction details.
Top of Form 1.Award 8.33 pointsPringle Company distribu.docxturveycharlyn
Top of Form
1.
Award: 8.33 points
Pringle Company distributes a single product. The company’s sales and expenses for a recent month follow:
Total
Per Unit
Sales
$
300,000
$
20
Variable expenses
210,000
14
Contribution margin
90,000
$
6
Fixed expenses
78,000
Net operating income
$
12,000
Required:
1.
What is the monthly break-even point in units sold and in sales dollars? (Omit the "$" sign in your response.)
Break-even point in unit sales
units
Break-even point in sales dollars
$
2.
Without resorting to computations, what is the total contribution margin at the break-even point? (Omit the "$" sign in your response.)
Total contribution margin
$
3.
How many units would have to be sold each month to earn a target profit of $31,200? Use the formula method.
Units sold
4.
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places. Omit the "$" and "%" signs in your response.)
Dollars
Percentage
Margin of safety
$
%
5.
What is the company’s CM ratio? If monthly sales increase by $61,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (Omit the "$" and "%" signs in your response.)
CM ratio
%
Net operating income increases by
$
References
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Difficulty: EasyLearning Objective: 05-05 Determine the level of sales needed to achieve a desired target profit.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-06 Determine the break-even point.
2.
Award: 8.33 points
Reveen Products sells camping equipment. One of the company’s products, a camp lantern, sells for $130 per unit. Variable expenses are $91 per lantern, and fixed expenses associated with the lantern total $179,400 per month.
Required:
1.
Compute the company’s break-even point in number of lanterns and in total sales dollars. (Omit the "$" sign in your response.)
Number of lanterns
Total sales dollars
$
2.
If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.)
Higher break-even point
Lower break-even point
3.
At present, the company is selling 16,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, a ...
Exchange with TaxesThe table below shows the marginal values f.docxSANSKAR20
Exchange with Taxes
The table below shows the marginal values for product X for five different individuals, A - E. The values are all in dollars. This table will be used to answer questions 1 - 9. For each question, assume that all transaction costs are zero and that when indifferent, sellers will sell and buyers will buy the marginal unit. Read each question carefully and make sure you understand the market conditions before answering. All of the questions are worth 5 points.
TABLE I
A
B
C
D
E
Quantity
MV
Quantity
MV
Quantity
MV
Quantity
MV
Quantity
MV
1
26
1
26
1
26
1
26
1
28
2
24
2
24
2
24
2
24
2
25
3
22
3
22
3
22
3
22
3
22
4
20
4
20
4
20
4
20
4
18
5
18
5
18
5
18
5
18
5
16
6
16
6
16
6
16
6
16
6
15
7
14
7
14
7
14
7
14
7
14
8
12
8
12
8
12
8
12
8
12
9
10
9
10
9
10
9
10
9
10
10
8
10
8
10
8
10
8
10
8
11
6
11
6
11
6
11
6
11
6
12
4
12
4
12
4
12
4
12
4
13
2
13
2
13
2
13
2
13
2
At the start A has 10 units of X, B has 4, C has 7, D has 9 and E has 2.
a. what will be the equilibrium price? ____________
b. In equilibrium, how many units of X will each person own.? __
2. Start over again. Everything is exactly the same as it was at the start of question 1 except that the
government now levies an excise tax on the sellers of X equal to $4 per unit of X sold.
a. What would the market price have to be in order to get A to sell 2 units of X? ____
b. What would the market price have to be in order to get B to buy 2 units of X? ____
c. If there is trade in this market with the government tax on X, what will be the
equilibrium price? ____
d. How many units of X will each person own after trade? _____
e. How much of the tax per unit was the seller able to pass on to the buyers? ____
3. Start over again. Everything is exactly the same as it was at the start of question 1 except that the
government now levies an excise tax on the buyers of X equal to $4 per unit of X sold.
a. What would the market price have to be in order to get A to sell 2 units of X? ____
b. What would the market price have to be in order to get B to buy 2 units of X? ____
c. If there is trade in this market with the government tax on X, what will be the
equilibrium price? ____
d. How many units of X will each person own after trade? _____
e. How much of the tax per unit was the buyer able to pass on to the sellers? ____
f. How much total tax revenue did the government collect? ____
4. Compare the equilibrium in question 2 with the equilibrium in question 3.
a. How much, in total, did the buyers pay for each unit of X when the tax was levied on the
buyer? ____
b. How much, in total did the sellers receive and get to keep for each unit of X they sold,
when the tax was levied on the buyers? ___
c. How much, in total, did the buyers pay for each unit of X when the tax was levied on the
sellers? ___
d. How much, in total, did the sellers receive and get to keep for each unit of X they sold,
when the tax was levied on the sellers? ___
El ...
REQUIRED This project is worth 25 points. It is an opportunit.docxdebishakespeare
REQUIRED: This project is worth 25 points. It is an opportunity to put together some of the
things you have learned in different parts of this course. Read the case and answer the
requirements below. To receive credit you must show your calculations and write full answers
using one side of a page for each requirement (1-5). We must ask you to handwrite your answers.
Hand your project in to the accounting lab 133MH during lab hours on or before Thursday
November 15 at 6 PM.
1) YOUR NAME ________________________________________________
2) YOUR PEOPLESOFT ID ____________________________________________
3) YOUR INSTRUCTOR’S NAME _____________________________
4) YOUR RECEIPT NUMBER _______________(lab assistants will give you this)
CASE
Manny Fold owns a factory that specializes in making titanium valves for high performance
engines on a just in time basis. Thus, Manny produces what he sells in a particular month. There
are no inventories of finished goods or work in process. However, Manny does require that an
inventory of direct raw materials equal to 10% of next month’s production requirement be
available at the end of each month. To build his business and gain new customers Manny has
extended generous credit terms to his customers. While Manny is confident about the
fundamentals of his business, he is concerned about the possible cash flow implications.
Manny’s clients drive a hard bargain because they can easily switch suppliers. They all do pay
eventually, but many of them take their time about doing so and Manny is reluctant to get tough
with them for fear they will take their business elsewhere. He tells you that all his sales are on
credit (no cash sales). He typically collects only 20% of sales in the month of the sale, 40% of
sales in the month after the sale and 40% of sales two months later (for example 20% of August
sales are collected in August, 40% in September and 40% in October). On the other hand he pays
for 70% of his materials purchases in the month of the purchase and only 30% in the month after.
Costs of labor and overhead other than depreciation property taxes and insurance are paid in the
same month they are incurred. Property taxes for 3 months will be paid in October. Monthly
fixed selling and administrative costs, other than interest, amount to $41,000, of which $10,000
is depreciation. These operating costs, excepting depreciation, are paid in cash in the month
incurred. There are no variable selling or administrative costs. Manny has large tax loss carry
forwards from a previous unsuccessful business venture. Therefore he does not expect to pay any
income taxes this year. (In other words you may ignore income taxes).
Sales revenues in August were $315,000 and in September are expected to be $325,500.
Purchases in September total $92,480. The budgeted selling price of valves for October,
November, and December is $21 per valve. Because of ma ...
Top of Form 1.Award 8.33 pointsPringle Company distribu.docxturveycharlyn
Top of Form
1.
Award: 8.33 points
Pringle Company distributes a single product. The company’s sales and expenses for a recent month follow:
Total
Per Unit
Sales
$
300,000
$
20
Variable expenses
210,000
14
Contribution margin
90,000
$
6
Fixed expenses
78,000
Net operating income
$
12,000
Required:
1.
What is the monthly break-even point in units sold and in sales dollars? (Omit the "$" sign in your response.)
Break-even point in unit sales
units
Break-even point in sales dollars
$
2.
Without resorting to computations, what is the total contribution margin at the break-even point? (Omit the "$" sign in your response.)
Total contribution margin
$
3.
How many units would have to be sold each month to earn a target profit of $31,200? Use the formula method.
Units sold
4.
Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (Round your percentage answer to 2 decimal places. Omit the "$" and "%" signs in your response.)
Dollars
Percentage
Margin of safety
$
%
5.
What is the company’s CM ratio? If monthly sales increase by $61,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? (Omit the "$" and "%" signs in your response.)
CM ratio
%
Net operating income increases by
$
References
WorksheetLearning Objective: 05-03 Use the contribution margin ratio (CM ratio) to compute changes in contribution margin and net operating income resulting from changes in sales volume.Learning Objective: 05-07 Compute the margin of safety and explain its significance.
Difficulty: EasyLearning Objective: 05-05 Determine the level of sales needed to achieve a desired target profit.
Learning Objective: 05-01 Explain how changes in activity affect contribution margin and net operating income.Learning Objective: 05-06 Determine the break-even point.
2.
Award: 8.33 points
Reveen Products sells camping equipment. One of the company’s products, a camp lantern, sells for $130 per unit. Variable expenses are $91 per lantern, and fixed expenses associated with the lantern total $179,400 per month.
Required:
1.
Compute the company’s break-even point in number of lanterns and in total sales dollars. (Omit the "$" sign in your response.)
Number of lanterns
Total sales dollars
$
2.
If the variable expenses per lantern increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume that the fixed expenses remain unchanged.)
Higher break-even point
Lower break-even point
3.
At present, the company is selling 16,000 lanterns per month. The sales manager is convinced that a 10% reduction in the selling price will result in a 25% increase in the number of lanterns sold each month. Prepare two contribution format income statements, one under present operating conditions, a ...
Exchange with TaxesThe table below shows the marginal values f.docxSANSKAR20
Exchange with Taxes
The table below shows the marginal values for product X for five different individuals, A - E. The values are all in dollars. This table will be used to answer questions 1 - 9. For each question, assume that all transaction costs are zero and that when indifferent, sellers will sell and buyers will buy the marginal unit. Read each question carefully and make sure you understand the market conditions before answering. All of the questions are worth 5 points.
TABLE I
A
B
C
D
E
Quantity
MV
Quantity
MV
Quantity
MV
Quantity
MV
Quantity
MV
1
26
1
26
1
26
1
26
1
28
2
24
2
24
2
24
2
24
2
25
3
22
3
22
3
22
3
22
3
22
4
20
4
20
4
20
4
20
4
18
5
18
5
18
5
18
5
18
5
16
6
16
6
16
6
16
6
16
6
15
7
14
7
14
7
14
7
14
7
14
8
12
8
12
8
12
8
12
8
12
9
10
9
10
9
10
9
10
9
10
10
8
10
8
10
8
10
8
10
8
11
6
11
6
11
6
11
6
11
6
12
4
12
4
12
4
12
4
12
4
13
2
13
2
13
2
13
2
13
2
At the start A has 10 units of X, B has 4, C has 7, D has 9 and E has 2.
a. what will be the equilibrium price? ____________
b. In equilibrium, how many units of X will each person own.? __
2. Start over again. Everything is exactly the same as it was at the start of question 1 except that the
government now levies an excise tax on the sellers of X equal to $4 per unit of X sold.
a. What would the market price have to be in order to get A to sell 2 units of X? ____
b. What would the market price have to be in order to get B to buy 2 units of X? ____
c. If there is trade in this market with the government tax on X, what will be the
equilibrium price? ____
d. How many units of X will each person own after trade? _____
e. How much of the tax per unit was the seller able to pass on to the buyers? ____
3. Start over again. Everything is exactly the same as it was at the start of question 1 except that the
government now levies an excise tax on the buyers of X equal to $4 per unit of X sold.
a. What would the market price have to be in order to get A to sell 2 units of X? ____
b. What would the market price have to be in order to get B to buy 2 units of X? ____
c. If there is trade in this market with the government tax on X, what will be the
equilibrium price? ____
d. How many units of X will each person own after trade? _____
e. How much of the tax per unit was the buyer able to pass on to the sellers? ____
f. How much total tax revenue did the government collect? ____
4. Compare the equilibrium in question 2 with the equilibrium in question 3.
a. How much, in total, did the buyers pay for each unit of X when the tax was levied on the
buyer? ____
b. How much, in total did the sellers receive and get to keep for each unit of X they sold,
when the tax was levied on the buyers? ___
c. How much, in total, did the buyers pay for each unit of X when the tax was levied on the
sellers? ___
d. How much, in total, did the sellers receive and get to keep for each unit of X they sold,
when the tax was levied on the sellers? ___
El ...
REQUIRED This project is worth 25 points. It is an opportunit.docxdebishakespeare
REQUIRED: This project is worth 25 points. It is an opportunity to put together some of the
things you have learned in different parts of this course. Read the case and answer the
requirements below. To receive credit you must show your calculations and write full answers
using one side of a page for each requirement (1-5). We must ask you to handwrite your answers.
Hand your project in to the accounting lab 133MH during lab hours on or before Thursday
November 15 at 6 PM.
1) YOUR NAME ________________________________________________
2) YOUR PEOPLESOFT ID ____________________________________________
3) YOUR INSTRUCTOR’S NAME _____________________________
4) YOUR RECEIPT NUMBER _______________(lab assistants will give you this)
CASE
Manny Fold owns a factory that specializes in making titanium valves for high performance
engines on a just in time basis. Thus, Manny produces what he sells in a particular month. There
are no inventories of finished goods or work in process. However, Manny does require that an
inventory of direct raw materials equal to 10% of next month’s production requirement be
available at the end of each month. To build his business and gain new customers Manny has
extended generous credit terms to his customers. While Manny is confident about the
fundamentals of his business, he is concerned about the possible cash flow implications.
Manny’s clients drive a hard bargain because they can easily switch suppliers. They all do pay
eventually, but many of them take their time about doing so and Manny is reluctant to get tough
with them for fear they will take their business elsewhere. He tells you that all his sales are on
credit (no cash sales). He typically collects only 20% of sales in the month of the sale, 40% of
sales in the month after the sale and 40% of sales two months later (for example 20% of August
sales are collected in August, 40% in September and 40% in October). On the other hand he pays
for 70% of his materials purchases in the month of the purchase and only 30% in the month after.
Costs of labor and overhead other than depreciation property taxes and insurance are paid in the
same month they are incurred. Property taxes for 3 months will be paid in October. Monthly
fixed selling and administrative costs, other than interest, amount to $41,000, of which $10,000
is depreciation. These operating costs, excepting depreciation, are paid in cash in the month
incurred. There are no variable selling or administrative costs. Manny has large tax loss carry
forwards from a previous unsuccessful business venture. Therefore he does not expect to pay any
income taxes this year. (In other words you may ignore income taxes).
Sales revenues in August were $315,000 and in September are expected to be $325,500.
Purchases in September total $92,480. The budgeted selling price of valves for October,
November, and December is $21 per valve. Because of ma ...
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Would you please help me Calculate the cash discount and.pdf
1. Would you please help me ? Calculate the cash discount and the net...
Would you please help me ?
Calculate the cash discount and the net amount due the transaction (in $). (Round your
answers to the nearest cent.)
Amount of
Invoice Terms of
Sale Cash
Discount Net
Amount Due
$4,010.20 4/10, n/30 $ $
2.
A boutique buys some merchandise with a list price of $3,800. If the wholesaler extends a
40% trade discount rate, find the trade discount (in $).
$
3.
Using the EOM, ROG, and Extra dating methods, calculate the discount date and the net date
for the transaction. Unless otherwise specified, the net date is 20 days after the discount
date.
Date of Invoice Terms of Sale Discount Date Net Date
March 27 2/10, ROG
Rec'd April 28 ---Select--- January February March April May June July August September
October November December ---Select--- January February March April May June July
August September October November December
4.
This question has several parts that must be completed sequentially. If you skip a part of the
question, you will not receive any points for the skipped part, and you will not be able to
come back to the skipped part.
Tutorial Exercise
Sharma Kennels buys some items with a list price of $4,600. The supplier extends a 30%
trade discount rate. What is the net price (in $)?
5.
This question has several parts that must be completed sequentially. If you skip a part of the
question, you will not receive any points for the skipped part, and you will not be able to
2. come back to the skipped part.
Tutorial Exercise
A retailer purchases some merchandise with an invoice price of $21,800 and terms of sale of
6/15, n/45. What is the net amount due (in $) on the order if a partial payment of $10,800 is
made on the 15th day?
Step 1
The terms of the sale 6/15, n/45 means that a 6% cash discount is offered if the invoice is
paid within 15 days. If the invoice is not paid within 15 days, the full amount must be paid
within 45 days. A partial payment may be made to take advantage of the discount if the full
amount cannot be paid before the discount date. The amount due after a partial payment
has been made, called the net amount due, is the difference of the net price and the partial
payment credit.
Since a partial payment of $10,800 was made on the 15th day, a partial payment credit will
be applied. This formula is below.
partial payment credit =
partial payment
100% − cash discount rate
The cash discount rate is 6%, so we have the following.
100% − cash discount rate = 100% − 6%
= %
6.
A business supply store bought some merchandise with a list price of $13,800. The
wholesaler extended a trade discount that made the net price $8,970. Find the trade
discount rate (as a %).
%
7.
Calculate the net price factor and single equivalent discount. For convenience, round your
answers to five decimal places when necessary.
Trade
Discount
Rate Net Price
Factor Single
Equivalent
Discount
20/15/14
8.
Use the Panorama Products invoice below to answer the question. (Note: Although 26 boxes
of 2" reflective tape were ordered, only 11 boxes were shipped. Charge only for the boxes
shipped.)
Invoice
Panorama Products
486 5th Avenue
3. Eureka, CA 95501
R-7438
June 16, 20XX
14122
J.M. Hardware Supply
2051 West Adams Blvd.
Lansing, MI 48901
SAME
H. Berns
Herman Trucking
Net 45 Days
Effingham, IL
17 cases
17 cases
Masking Tape 1/2" Standard
$21.90
12 cases
12 cases
Masking Tape 1 1/2" Standard
24.79
26 boxes
11 boxes
2" Reflective Tape
89.56
37 case
37 case
Sandpaper Assorted
74.64
$62.45
$32.99
Insurance
An invoice. The top of the invoice is divided into several distinct sections.
The first section is located in the top left of the invoice, is unlabeled, and contains
"Panorama Products 486 5th Avenue Eureka, CA 95501."
The second section is located in the top right of the invoice, is unlabeled, and contains "No.
R—7438."
The third section is located below the second and to the right of the first, is unlabeled, and
contains "Invoice Date June 16, 20XX" and "Customer's Order No. 14122."
The fourth section is located below the first, is labeled "Sold To:," and contains "J.M.
Hardware Supply 2051 West Adams Blvd. Lansing, MI 48901."
The fifth section is located below the third, is labeled "Ship To:," and contains "SAME."
The sixth section is below the fourth and fifth sections, extends horizontally across the
invoice, and is divided into four subsections. The subsections are as follows.
4. Salesman H. Berns
Shipped Via Herman Trucking
Terms Net 45 Days
F.O.B. Effingham, IL
The bottom of the invoice contains the itemization of the invoice. Information regarding this
itemization can be found in the adjacent table.
Table
What is the insurance on the invoice?
$32.99$210.89 $62.45Effingham, ILNone listed
9.
Calculate the trade discount and net price (in $) to the nearest cent.
List Price Trade Discount Rate Trade Discount Net Price
$287.00 25% $ $
10.
Use the Panorama Products invoice below to answer the question. (Note: Although 26 boxes
of 2" reflective tape were ordered, only 11 boxes were shipped. Charge only for the boxes
shipped.)
Invoice
Panorama Products
486 5th Avenue
Eureka, CA 95501
R-7439
June 16, 20XX
13122
J.M. Hardware Supply
2051 West Adams Blvd.
Lansing, MI 48901
SAME
H. Gilbert
Marshall Trucking
Net 30 Days
Effingham, IL
17 cases
17 cases
Masking Tape 1/2" Standard
$21.70
12 cases
12 cases
Masking Tape 1 1/2" Standard
24.79
26 boxes
11 boxes
2" Reflective Tape
5. 89.56
37 case
37 case
Sandpaper Assorted
74.74
$62.45
$42.99
Insurance
An invoice. The top of the invoice is divided into several distinct sections.
The first section is located in the top left of the invoice, is unlabeled, and contains
"Panorama Products 486 5th Avenue Eureka, CA 95501."
The second section is located in the top right of the invoice, is unlabeled, and contains "No.
R—7439."
The third section is located below the second and to the right of the first, is unlabeled, and
contains "Invoice Date June 16, 20XX" and "Customer's Order No. 13122."
The fourth section is located below the first, is labeled "Sold To:," and contains "J.M.
Hardware Supply 2051 West Adams Blvd. Lansing, MI 48901."
The fifth section is located below the third, is labeled "Ship To:," and contains "SAME."
The sixth section is below the fourth and fifth sections, extends horizontally across the
invoice, and is divided into four subsections. The subsections are as follows.
Salesman H. Gilbert
Shipped Via Marshall Trucking
Terms Net 30 Days
F.O.B. Effingham, IL
The bottom of the invoice contains the itemization of the invoice. Information regarding this
itemization can be found in the adjacent table.
Table
What is the invoice number?
77R-7439 489011312295501
11.
Complete the following table by finding the net price factor, single equivalent discount,
trade discount (in dollars), and net price (in dollars). Round the net price factor and single
equivalent discount to five decimal places, and the trade discount and net price to the
nearest cent, when necessary.
List Price Trade
Discount
Rate Net Price
Factor Single
Equivalent
Discount Trade
Discount Net Price
$630.70 31/15/5 $ $
12.
6. Use the Panorama Products invoice below to answer the question. (Note: Although 26 boxes
of 2" reflective tape were ordered, only 11 boxes were shipped. Charge only for the boxes
shipped.)
Invoice
Panorama Products
486 5th Avenue
Eureka, CA 95501
R-7538
June 16, 20XX
14155
J.M. Hardware Supply
2051 West Adams Blvd.
Lansing, MI 48901
SAME
H. Gilbert
Herman Trucking
Net 60 Days
Effingham, IL
16 cases
16 cases
Masking Tape 1/2" Standard
$21.70
12 cases
12 cases
Masking Tape 1 1/2" Standard
24.79
26 boxes
11 boxes
2" Reflective Tape
87.56
37 case
37 case
Sandpaper Assorted
74.74
$61.45
$42.99
Insurance
An invoice. The top of the invoice is divided into several distinct sections.
The first section is located in the top left of the invoice, is unlabeled, and contains
"Panorama Products 486 5th Avenue Eureka, CA 95501."
The second section is located in the top right of the invoice, is unlabeled, and contains "No.
R—7538."
The third section is located below the second and to the right of the first, is unlabeled, and
7. contains "Invoice Date June 16, 20XX" and "Customer's Order No. 14155."
The fourth section is located below the first, is labeled "Sold To:," and contains "J.M.
Hardware Supply 2051 West Adams Blvd. Lansing, MI 48901."
The fifth section is located below the third, is labeled "Ship To:," and contains "SAME."
The sixth section is below the fourth and fifth sections, extends horizontally across the
invoice, and is divided into four subsections. The subsections are as follows.
Salesman H. Gilbert
Shipped Via Herman Trucking
Terms Net 60 Days
F.O.B. Effingham, IL
The bottom of the invoice contains the itemization of the invoice. Information regarding this
itemization can be found in the adjacent table.
Table
What is the unit price (in $) of 1/2" Standard Masking Tape?
$
13.
Calculate the trade discount and net price (in $) to the nearest cent.
List Price Trade Discount Rate Trade Discount Net Price
$21.39 18% $ $
14.
This question has several parts that must be completed sequentially. If you skip a part of the
question, you will not receive any points for the skipped part, and you will not be able to
come back to the skipped part.
Tutorial Exercise
A photographer buys some merchandise with a list price of $6,000. If the supplier offers
trade discount rates of 45/20/5, find the trade discount. (Find the single equivalent
discount first.)
Step 1
Recall the steps to find the trade discount given the list price and trade discount rates.
Calculate the net price factor by subtracting each trade discount from 100%, converting to
decimal form, and multiplying them together.
Find the single equivalent discount by subtracting the net price factor from 1.
The trade discount is the product of the list price and the single equivalent discount.
The given trade discounts of 45/20/5 represent individual discounts of 45%, 20%, and 5%.
First subtract each trade discount from 100% to find the complement and convert to
decimal form.
Find the complement of the 45% trade discount.
complement = 100% − trade discount
= 100% − 45%
= %
Converting this percentage to a decimal gives .
Find the complement of the 20% trade discount.
8. complement = 100% − trade discount
= 100% − 20%
= %
Converting this percentage to a decimal gives .
Find the complement of the 5% trade discount.
complement = 100% − trade discount
= 100% − 5%
= %
Converting this percentage to a decimal gives .
15.
Suppose a certain appliance store purchases the following items. Calculate the extended
total after the trade discounts for each line, the invoice subtotal, and the invoice total.
(Round your answers to the nearest cent.)
Quantity Unit Merchandise Unit List Trade
Discounts Extended
Total
150 ea. Blenders $49.95 20/15/15 $
300 ea. Toasters $38.88 20/10/10 $
18 doz. Coffee Mills $244.30 30/9/7 $
12 doz. Juicers $440.00 25/10/5 $
Invoice subtotal $
Extra
5
1
2
%
volume discount on total order
− $
Invoice total $
16.
Using the ordinary dating method, calculate the discount date and the net date for the
transaction.
Date of Invoice Terms of Sale Discount Date(s) Net Date
April 5 2/10, n/45 ---Select--- January February March April May June July August
September October November December ---Select--- January February March April May
June July August September October November December
17.
Suppose a supermarket ordered 11 cases of organic vegetable soup with a list price of
$18.90 per case and 6 cases of organic baked beans with a list price of $33.50 per case. The
wholesaler offered the supermarket a 39% trade discount. (Round your answers to the
nearest cent.)
(a)
What is the total extended list price (in $) of the order?
9. $
(b)
What is the total amount of the trade discount (in $) on this order?
$
(c)
What is the total net amount (in $) the supermarket owes the wholesaler for the order?
$
18.
Using the ordinary dating method, calculate the discount date and the net date for the
transaction.
Date of Invoice Terms of Sale Discount Date(s) Net Date
October 11 3/20, n/45 ---Select--- January February March April May June July August
September October November December ---Select--- January February March April May
June July August September October November December
19.
Complete the following receipt (in $).
Stock # Quantity Unit Description Unit Price Total
424 15 ea. 24" Bird Feeder $23.00
121 33 10 lbs Standard Feed 11.00
504 39 ea. Wren House 12.00
Invoice Subtotal
Shipping Charges $47.00
Invoice Total
20.
Use the Panorama Products invoice below to answer the question. (Note: Although 26 boxes
of 2" reflective tape were ordered, only 10 boxes were shipped. Charge only for the boxes
shipped.)
Invoice
Panorama Products
486 5th Avenue
Eureka, CA 95501
R-7538
June 16, 20XX
14155
J.M. Hardware Supply
2051 West Adams Blvd.
Lansing, MI 48901
SAME
H. Berns
Gilbert Trucking
Net 30 Days
Effingham, IL
17 cases
10. 17 cases
Masking Tape 1/2" Standard
$21.90
11 cases
11 cases
Masking Tape 1 1/2" Standard
25.79
26 boxes
10 boxes
2" Reflective Tape
88.56
37 case
37 case
Sandpaper Assorted
74.74
$62.45
$32.99
Insurance
An invoice. The top of the invoice is divided into several distinct sections.
The first section is located in the top left of the invoice, is unlabeled, and contains
"Panorama Products 486 5th Avenue Eureka, CA 95501."
The second section is located in the top right of the invoice, is unlabeled, and contains "No.
R—7538."
The third section is located below the second and to the right of the first, is unlabeled, and
contains "Invoice Date June 16, 20XX" and "Customer's Order No. 14155."
The fourth section is located below the first, is labeled "Sold To:," and contains "J.M.
Hardware Supply 2051 West Adams Blvd. Lansing, MI 48901."
The fifth section is located below the third, is labeled "Ship To:," and contains "SAME."
The sixth section is below the fourth and fifth sections, extends horizontally across the
invoice, and is divided into four subsections. The subsections are as follows.
Salesman H. Berns
Shipped Via Gilbert Trucking
Terms Net 30 Days
F.O.B. Effingham, IL
The bottom of the invoice contains the itemization of the invoice. Information regarding this
itemization can be found in the adjacent table.
Table
Who is the salesperson?
J.M. HardwareGilbert Trucking H. BernsPanorama ProductsWest Adams
21.
[-/0.78 Points]DETAILSBRECMBC9 7.III.002.
MY NOTES
ASK YOUR TEACHER
11. PRACTICE ANOTHER
Calculate the net price factor and net price (in dollars). For convenience, round the net price
factor to five decimal places and the net price to the nearest cent, when necessary.
List Price Trade Discount Rate Net Price Factor Net Price
$495.60 22/15/5 $
22.
A retailer buys merchandise from a supplier with an invoice amount of $12,200. The terms
of the sale are 5/20, n/30. What is the net amount due (in $) on the order if the bill is paid
by the 20th day?
$
23.
Suppose a certain car audio manufacturer receives an order of a certain brand of satellite
radios listing for $9,500 with trade discounts of 25/12/8.
(a)
What is the net price factor?
(b)
What is the single equivalent discount?
(c)
What is the amount (in dollars) of the trade discount?
$
(d)
What is the net price (in dollars) of the order?
$
24.
Calculate the trade discount (in $) and trade discount rate (as a %). Round your answer to
the nearest tenth of a percent.
List Price Trade Discount Trade Discount Rate Net Price
$4,500.00 $ % $3,515.00
25.
Calculate the credit given for the partial payment and the net amount due on the invoice (in
$). (Round your answers to the nearest cent.)
Amount of
Invoice Terms of
Sale Partial
Payment Credit for
Partial Payment Net
Amount Due
$8,303.00 2/10, n/30 $2,700 $ $
26.
Calculate the trade discount (in $). Round your answer to the nearest cent.
List Price Trade Discount Rate Trade Discount
$135.50 12% $
27.
12. As part of the employment interview for an accounting job at Sound Design, you have been
asked to answer the questions below, based on an invoice from one of Sound Design's
vendors, Target Electronic Wholesalers.
Invoice
Stock # Description Unit Price Amount
4811V Stereo Receivers 50 ✕$294.50 = _______________________
511CX Blu-Ray Players 25 ✕$133.28 = _______________________
6146M Home Theater Systems 40 ✕$659.12 = _______________________
1031A LCD TVs 20 ✕$597.00 = _______________________
Merchandise Total _______________________
Insurance + Shipping $1,350.00
Invoice Total _______________________
An invoice. The top of the invoice is divided into several distinct sections.
The first section is located in the top left of the invoice, is unlabeled, and contains an image
of a target with an arrow in the center of the target.
The second section is located in the top center of the invoice, is unlabeled, and contains
"Target Electronic Wholesalers 1979 N.E. 123 Street Jacksonville, FL 32204."
The third section is located below the first, is labeled "Sold To:," and contains "Sound Design
480 McDowell Rd. Phoenix, AZ 85008."
The fourth section is located to the right of the third, is unlabeled, and contains "Invoice
Date June 28, 20XX" and "Terms of Sale 3/15, n/30 ROG."
The bottom of the invoice contains the itemization of the invoice. Information regarding this
itemization can be found in the adjacent table.
Table
(a)
Complete the invoice itemization by finding the total amount (in $) for each item, the
merchandize total (in $), and the total amount of the invoice (in $).
Stock # Description Unit Price Amount
4811V Stereo Receivers 50 x $294.50 $
511CX Blu-Ray Players 25 x $133.28 $
6146M Home Theater Systems 40 x $659.12 $
1031A LCD TVs 20 x $597.00 $
Merchandise Total $
Insurance + Shipping $
Invoice Total $
(b)
What are the discount date and the net date if the shipment arrived on July 14?
Discount Date ---Select--- January February March April May June July August September
October November December Net Date ---Select--- January February March April May June
July August September October November December
(c)
While in transit, five Blu-ray players and four LCD TVs were damaged and will be returned.
What is the amount (in $) of the returned merchandise? What is the revised merchandise
13. total (in $)?
Returned merchandise$ Revised merchandise total$
(d)
What are the amount (in $) of the cash discount and the net amount due if the discount is
taken? (Round your answers to the nearest cent.)
Cash discount$ Net amount due$
(e)
If Sound Design sends in a partial payment of $30,000.00 within the discount period, what is
the net balance (in $) still due? (Round your answer to the nearest cent.)
$
28.
[-/0.78 Points]DETAILSBRECMBC9 7.III.004.
MY NOTES
ASK YOUR TEACHER
PRACTICE ANOTHER
Calculate the net price factor and net price (in dollars). For convenience, round the net price
factor to five decimal places and the net price to the nearest cent, when necessary.
List Price Trade Discount Rate Net Price Factor Net Price
$769.30 15/10/5 $
29.
Calculate the net price factor (as a %) and net price (in $) by using the complement method.
Round your answer to the nearest cent.
List Price Trade Discount Rate Net Price Factor Net Price
$1,244.25 45.2% % $
30.
Using the EOM, ROG, and Extra dating methods, calculate the discount date and the net date
for the transaction. Unless otherwise specified, the net date is 20 days after the discount
date.
Date of Invoice Terms of Sale Discount Date Net Date
April 29 3/15, EOM ---Select--- January February March April May June July August
September October November December ---Select--- January February March April May
June July August September October November December
31.
Suppose you are the buyer for the housewares department of a department store. A number
of vendors in your area carry similar lines of merchandise. On sets of microwavable serving
bowls, Brand A offers a list price of $400 per dozen less a 37% trade discount. Brand B
offers a similar set for a list price of $425 less a 42% trade discount.
(a)
Which vendor is offering the lower net price?
Brand ABrand B
(b)
If you order 500 dozen sets of the bowls, how much money (in $) will be saved by using the
lower-priced vendor?
14. $
32.
Calculate the trade discount (in $). Round your answer to the nearest cent.
List Price Trade Discount Rate Trade Discount
$325.00 7% $
33.
Complete the following table by finding the net price factor, single equivalent discount,
trade discount (in dollars), and net price (in dollars). Round the net price factor and single
equivalent discount to five decimal places, and the trade discount and net price to the
nearest cent, when necessary.
List Price Trade
Discount
Rate Net Price
Factor Single
Equivalent
Discount Trade
Discount Net Price
$9,800.00 15/4/4 $ $
34.
Calculate the cash discount and the net amount due the transaction (in $).
Amount of
Invoice Terms of
Sale Cash
Discount Net
Amount Due
$15,660.00 2/10, n/45 $ $
35.
Using the EOM, ROG, and Extra dating methods, calculate the discount date and the net date
for the transaction. Unless otherwise specified, the net date is 20 days after the discount
date.
Date of Invoice Terms of Sale Discount Date Net Date
February 9 2/10, 60 Extra ---Select--- January February March April May June July August
September October November December ---Select--- January February March April May
June July August September October November December
36.
Calculate the net price factor (as a %) and net price (in $) by using the complement method.
Round your answer to the nearest cent.
List Price Trade Discount Rate Net Price Factor Net Price
$3,499.00 35% % $
37.
This question has several parts that must be completed sequentially. If you skip a part of the
question, you will not receive any points for the skipped part, and you will not be able to
come back to the skipped part.
15. Tutorial Exercise
A catering company buys some items with a list price of $7,000. If the supplier extends
trade discount rates of 35/30/25, find the net price (in $) using the net price factor,
complement method.
38.
Calculate the net price factor and net price (in dollars). For convenience, round the net price
factor to five decimal places and the net price to the nearest cent, when necessary.
List Price Trade Discount Rate Net Price Factor Net Price
$0.79 20/9/6 $