1 / 19

Mathematics of Buying

Mathematics of Buying. Cash Discounts: Other Methods. Objective. Solve Cash Discount Problems with EOM dating. Objective 1. End-of-Month Dating. Cash discount method End-of-Month (EOM) proximo. 3/10 EOM. 3/10 prox.

ban
Download Presentation

Mathematics of Buying

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Mathematics of Buying Cash Discounts: Other Methods

  2. Objective Solve Cash Discount Problems with EOM dating.

  3. Objective 1 End-of-Month Dating • Cash discount method • End-of-Month (EOM) • proximo 3/10 EOM 3/10 prox. 3% discount on invoice if payment is made by the 10th of the month that follows sale.

  4. Jan. 14 Jan. 31 Feb. 10 Feb. 28 Mar 2 End-of-Month Dating 1 of 2 • Invoice is dated January 14. • Terms are 2/10 EOM • Final Discount date = _______ • Net Payment date = _______ Feb. 10 Mar. 2 10 20 18 2

  5. Practice • Ch 6, Section 4 • Page 263 • # 4 • *Ch 6 Test • Page 271 • #5, 7

  6. Apr 26 Apr 30 May 31 June 15 June 30 July 5 End-of-Month Dating 2 of 2 If invoice is dated the 26th or later an extra month is added. Then count-off the 15 days… • Invoice is dated April 26. • Terms are 3/15 EOM • Final Discount date = _______ • Net Payment date = ________ June 15 July 5 15 20 15 5

  7. Objective 1 End-of-Month Dating: Summary • EOM Dating • Final Discount Date is determined by counting from the end of the month of the invoice date. • When the invoice is dated on the 26th or later, an extra month is added. • The Net Payment Due Date is 20 days after the last discount date.

  8. May 17 May 31 June 15 June 30 July 5 Proximo • Invoice Amt: $356.20 • Invoice Date: May 17 • Terms: 3/15 prox. • Date Invoice is paid: June 12 • Amount of Discount = ________ • Net due date = ________ • Amount Due (if disc. earned) = ________ June 15 July 5 $356.20 x .97 =$345.51 15 20 15 5

  9. Objective Receipt of Goods Dating

  10. Feb 20 Feb 5 Feb 28 Mar 12 ROG • Determine the final discount date for this problem. • Invoice Date: Jan. 15 • Terms: 3/15 ROG • Good Received on: Feb. 5 • Final discount date = ________ • Net payment due date = ________ Feb. 20 Mar. 12 15 20 12 8

  11. Sept. 3 July 25 July 31 Aug 31 Aug 14 ROG • Invoice Amt: $682.28 • Invoice Date: June 4 • Terms: 3/20 ROG • Delivery Date: July 25 • Date Invoice is paid: August 10 • Amount of Discount = __________________ • Amount Due = _______________________ • Extra: Net Payment Due Date = _____________ $682.28 x 2% = $13.65 $682.28 - $13.65 = $668.63 Sept. 3 20 6 14 20 3 17

  12. ROG Summary • Receipt of goods method is used when shipping times are longer. • Final discount date is set based upon when the merchandise is received, not the invoice date. • Net payment due date is 20 days after the final discount date.

  13. Practice • Ch 6, Section 4 • page 263 • #6 • Ch 6 Test • page 271 • #6

  14. Objective Extra Dating Method

  15. Objective 3 Extra Dating Method • Extends the discount period. • Used as an incentive during a slow sales season. • Used to gain a competitive sales advantage. 2/10-50 extra 2/10-50 ex. 2/10-50 x

  16. Nov 22 Nov 30 Dec 31 Jan 31 Jan 11 Dec 22 Dec 2* Extra Dating 1 of 2 • Invoice Date: Nov 22 • Terms: 1/10-20 x • Final Discount Date = ________ • Net Payment Date = ________ Dec. 22 Jan. 11 10 8 2 20 20 9 11

  17. Apr 12 Apr 30 May 31 June 30 July 6 Apr 27* June 16 Extra Dating 2 of 2 • Invoice Date: April 12 • Terms: 3/15-50 ex. • Final Discount Date = ________ • Net Payment Date = ________ June 16 July 6 15 50 3 31 16 20 14 6

  18. Practice • Ch 6, Section 4 • page 263 • #3, 5 • Ch 6 Test • page 271 • #8

  19. Practice • Ch 6, Section 4 • Determine discount and amount due • Page 263 • #9 – 13 • Application Problems • Pages 264 – 265 • #18 – 20, 25, 26

More Related