Merchandise was purchased on account from Jacob's Distributors on May 17. The pu

Accounting
Tutor: None Selected Time limit: 1 Day

Merchandise was purchased on account from Jacob's Distributors on May 17. The purchase price was $2,000, less a 10% trade discount and credit terms of 2/10, n/30.

Jan 4th, 2015

Money to be paid before the credit term expires;

using proportion 2/10=n/30

hence n=2*30/10

n=6 days

Cash Discount=Percentage Trade discount*Purchase Price

10/100*2000

0.1*2000

=$200

Actual price to be paid=Purchase Price-Cash discount

2000-200

=$1,800

Jan 4th, 2015

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