Write the shorthand expression of credit terms

Reference no: EM131109405

Purchases made on credit are due in full by the end of the billing period. Many firms extend a discount for payment made in the first part of the billing period. The original invoice contains a type of shorthand notation that explains the credit terms that apply. (Note: Assume a 365-day year.)

a. Write the shorthand expression of credit terms for each of the following:

b. For each of the sets of credit terms in part a, calculate the number of days until full payment is due for invoices dated March 12.

c. For each of the sets of credit terms, calculate the cost of giving up the cash discount.

d. If the firm's cost of short-term financing is 8%, what would you recommend in regard to taking the discount or giving it up in eachcase?

Reference no: EM131109405

Questions Cloud

Compute the amount of the other comprehensive income : Compute the amount of the other comprehensive income (G/L) as of December 31, 2010. (Assume the January 1, 2010, balance was zero.)

Calculate the monthly payment on the available loan : Bob and Carol currently earn 5.2% annual interest on their savings. a. Calculate the cash down payment for the loan. b. Calculate the monthly payment on the available loan.

Indicate the pension related amounts that would be reported : Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Ferrari Company for the year 2010.

Prove to whoever is wrong that the other is correct : Erica Stone works in an accounts payable department. She has attempted to convince her boss to take the discount on the 3/10 net 45 credit terms most suppliers offer, but her boss argues that giving up the 3% discount is less costly than a short-term..

Write the shorthand expression of credit terms : Purchases made on credit are due in full by the end of the billing period. Many firms extend a discount for payment made in the first part of the billing period. The original invoice contains a type of shorthand notation that explains the credit term..

Determine the amounts of the components of pension expense : Prepare the journal entry or entries to record pension expense and the employer's contribution to the pension trustee in 2010.

Determine the cost of giving up the cash discount : Determine the cost of giving up the cash discount under each of the following terms of sale. (Note: Assume a 365-day year.) a. 2/10 net 30 b. 1/10 net 30 c. 2/10 net 45 d. 3/10 net 45 e. 1/10 net 60 f. 3/10 net 30 g. 4/10 net 180

Prepare the journal entry for pension expense for 2010 : Using the data above, compute pension expense for Webb Corp. for the year 2010 by preparing a pension worksheet.

Determine when a firm must pay for purchases : Determine when a firm must pay for purchases made and invoices dated on November 25 under each of the following credit terms:a. Net 30 date of invoice b. Net 30 EOM c. Net 45 date of invoice d. Net 60 EOM

User Account

All Pages