TAMUSA Hotel purchases towels with an invoice price of $25,700 on April 29, and terms of sale of 4/15, 3/25, n/30. What is the net amount due on the order if a partial payment of $11,500 is made on the 10 th day of May?
A. $11,970.83
B. $12,365.83
C. $13,720.83
D. $11,988.83
Answer: C. $13,720.83
Total price is 25700 of which, the part payment is being made on 10th May which is within 15 days of the date of sale. This would mean that 4% discount is applicable on the part payment, so 11500 would be the 96% of the gross amount, calculated as following:
11500 = 0.96 \times Gross \ Amount
Gross \ Amount = 11979.17
Subtracting this from total amount due would give us the balance amount due as calculated below:
25700 -11979.17 =Amount \ due
Amount \ due = 13720.83
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