Get Excited with Discounts at Willetta Company!
How much discount will Willetta Company take?
a. $320
b. $436
c. $372
Answer: c. $372
Explanation: Willetta Company purchases inventory for $22,000 with terms 2/10, n/30. It then returns $3,200 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $220. The company pays the amount due within the discount period. Terms of sale 2/10, n/30 means there is a discount of 2% available on payment of due amount within the discount period of 10 days after sale with a net credit period of 30 days. As per the given data, the receivable amount is calculated as $22,000 - $3,200 - $220 = $18,580. Since the payment is made within the discount period, the discount taken will be $18,580 x 2% = $372.
Are you ready to save big at Willetta Company? With terms like 2/10, n/30, you can enjoy discounts on your purchases when you pay within the specified time frame. In this case, Willetta Company purchased inventory for $22,000 and returned $3,200 of the inventory to the supplier, along with receiving an allowance for defective inventory amounting to $220.
By paying the amount due within the discount period of 10 days, the company is eligible to take a discount of 2% on the total receivable amount. The discount calculated comes to $372, which means you can enjoy savings while still getting the inventory you need.
Don't miss out on the opportunity to save money while stocking up on inventory at Willetta Company. Take advantage of the discounts available and see your savings grow!