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Purchase Discounts
The 10-Cent Store on February 1, 2021 purchased $21,540 of merchandise from Holiday Express under the terms 1/8, n/20. On February 3, 2021 10-Cent returned $940 of merchandise because the items were broken. On February 10, 2021, Holiday Express gave 10-Cent a $1,040 allowance because the some of the merchandise was the wrong color and would be harder to sell.
Required:
Problem (a) If 10-Cent Store pays Holiday Express the entire amount it owes on February 8, 2021, how much will it pay to Holiday Express?
Problem (b) If 10-Cent Store pays Holiday Express the entire amount it owes on February 28, 2021, how much will it pay to Holiday Express?
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