An invoice dated March 12 in the amount of 50000 is received

An invoice dated March 12 in the amount of $50,000 is received by Reliance Corporation on March 16. Cash discount terms on the invoice are 3/10, n/30. On March 16 Reliance mails a check in the amount of $8,000 as partial payment on the invoice. The outstanding balance owed on the invoice is?

Solution

The invoice was dated on March 12. And partial payment was made on March 16. This means partial payment was made within 10 days of the invoice. And 3/10 means Reliance will now get a 3% discount, since it made payment within 10 days.

Payment made = $8000

Discount = 3% of 8000 = $240

So, amount of credit is : $8000 + $240 = $8240

Outstanding = Invoice Amount - Amount of credit

= $50,000 - $8240

= $41760

So, $41760 is the final answer.