Exam 7: Discounts: Trade and Cash

Brooks Dept. Store bought a stereo from a wholesaler with a $1,200 list price and a 28% trade discount. What is the trade discount amount? What is the net price of the stereo?

Sometimes the seller will prepay the freight if it is FOB destination.

Amounts of trade discounts are not fixed.

With terms of 2/10, n/30:

The net price equivalent rate helps one calculate the actual cost to the seller.

3/10, 1/15, n/30 means that a 3% cash discount is available from day 11 to day 15.

A local Ford dealership purchased a new Ford Focus from the manufacturer that lists for $22,178. Ford Motor Company offers the dealership an 18% trade discount. Shipping costs totaled $795.00. What did the local dealership pay for the Focus?

A discount period is always greater than the credit period.

Calculate the list price based on the information given below. Item List Price Chain Discount Net Price Grill ? 3/5 258.02

The net price equivalent rate of 9/15/18 is:

Match the following terms with their definitions. -FOB shipping point

Brenda purchased a total of five computers for $3,300. She received a 20% trade discount. What did Brenda pay for the computers?

4/10, n/30, ROG means a 4% discount can be taken within 10 days before the receipt of goods.

Which option yields the highest single equivalent discount? Option A Option B 7/10/17 9/11/16

Cash discounts are:

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

Given a list price of $4,400 and a chain discount of 2/3, find the A. Trade Discount, and B. Net Price

A single equivalent discount rate of 0.45975 means the buyer saves approximately 46 cents per $1 of list price.

Net price plus amount of trade discount equals list price.

Calculate the End of Discount Period and End of Credit Period. Date of Invoice Terms End of Discount Period End of Credit Period August 9th 2/10,n/30 ? ?