Question

On June 1, 2020, Sheffield Corp. sold merchandise with a list price of $76500 to Ivanhoe on account. Sheffield allowed trade discounts of 30% and 20%. Credit terms were 3/15, n/40 and the sale was made f.o.b. shipping point. Sheffield prepaid $950 of delivery costs for Ivanhoe as an accommodation. On June 12, 2020, Sheffield received from Ivanhoe a remittance in full payment amounting to __________.

Answer 1

Answer:

Sheffield received $ 43,790

Explanation:

76,500 list price

first discount of 30%

76,500 x ( 1 - 0.30) = 53,550

Then, we apply the second discount of 20%

53,550 x ( 1 - 0.20) = 42,840

plus the freight as it was Ivanhoe obligation but were paid by Sheffield to facilitate trade and were charged in the invoice

42,840 goods + 950 invoice = 43,790