On July 1, a company receives an invoice for $800 with the terms 1/10, net 30. On July 15, the payment should be:
Question
On July 1, a company receives an invoice for $800 with the terms 1/10, net 30. On July 15, the payment should be:
Solution
Step 1: Define the Problem
Identify the key components of the question:
- Invoice amount: $800
- Payment terms: 1/10, net 30
- Payment date: July 15
Step 2: Break Down the Problem
- Determine if the payment date falls within the discount period.
- Calculate the discount amount if applicable.
- Determine the final payment amount.
Step 3: Apply Relevant Concepts
- Discount Terms: 1/10 means a 1% discount is available if the invoice is paid within 10 days.
- Net Terms: Net 30 means the full invoice amount is due within 30 days.
Step 4: Analysis, Verify and Summarize
- Discount Period: The invoice date is July 1, so the discount period ends on July 10.
- Payment Date: July 15 is after the discount period.
- Since the payment is made after the discount period, no discount is applied.
Final Answer
The payment on July 15 should be the full invoice amount of $800.
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