irms usually offer their customers some form of trade credit. This allowance comes with certain terms of credit, which affect the cost of asset of sale for the buyer as well as the seller. Consider this case: Tasty Tuna Corporation buys on terms of 4/10, net 45 from its chief supplier.   A. If Tasty Tuna receives an invoice for $856.75, what would be the true price of this invoice? (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.) $822.48   $575.74   $699.11   $616.86     B. The nominal annual cost of the trade credit extended by the supplier is     , assuming a 365-day year. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.)   C. Suppose Tasty Tuna does not take advantage of the discount and then chooses to pay its supplier late—so that on average, Tasty Tuna will pay its supplier on the 50th day after the sale. As a result, Tasty Tuna can decrease its nominal cost of trade credit by     by paying late. (Note: Round all intermediate calculations to four decimal places, and your final answer to two decimal places.

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A purchase (supplier sales) invoice document was received by your business. The net value recorded on the invoice document was E750 with VAT (standard rate input tax) of E147, giving a total invoice value of E897. The standard rate of VAT is20%. Entering the invoice document details directly into your Sage computerised accounts file, the system auto-calculated VAT at £150 (Le. E750 x 20%). Which one of the following values (and explanations) for VAT is the CORRECT value to be recorded into the business accounts? Hide answer choices The computer calculated value and invoice document value are both wrong and no value should be entered into the business accounts. There are clearly errors in both of the calculations and, in such cases, it is better to ignore VAT than to input an incorrect value onto the system. Where the document and the computer value are different, an average should be used for VAT (input tax). This would require a VAT value of E148.50 Le. (E150 • E147) + 2) to be…

A wholesaler gives trade discounts 30%, 11% and 3% to his regular customers.a) Find the single discount equivalent to the given trade discounts.b) If the list price of an item is RM320, find the net price.

1) Trade credit terms of 2/10, net 90 are available. Calculate the cost of trade credit whenpayment is made on the net due date using the APR. Use a 360 day year 2) Trade credit terms of 2/10, net 90 are available. Calculate the cost of trade credit whenpayment is made on the net due date using the EAR (also known as APY). Use a 360day year.

Bramble Corp. made a $26200 sale on account with the following terms: 3/10, n/30. If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? O Debit Accounts Receivable for $26200. O Debit Accounts Receivable for $25414 and Sales Discounts for $786. O Debit Accounts Receivable for $25414. O Debit Accounts Receivable for $26200 and Sales Discounts for $786. Save for Later Attempts: 0 of 1 used Submit Answer

Company X sells on a 2/15, net 60, basis. Company Y buys goods with an invoice of $4,500.   a. How much can company Y deduct from the bill if it pays on day 15? (Do not round intermediate calculations.)       b. How many extra days of credit can company Y receive if it passes up the cash discount?       c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

N24.

BayFish Company currently uses maximum trade credit by not taking discounts on its purchases.  Company is planning to borrow from its bank, using notes payable, in order to take trade discounts.  The firm wants to determine the effect of this policy change on its net income. The standard industry credit terms offered by all its suppliers are 2/15, net 40 days, and BayFish pays in 40 days.  Its net purchases are $10,000 per day, using a 365-day year.  The interest rate on the notes payable is 8% percent and the firm’s tax rate is 40 percent.  If the firm implements the plan, what is the expected change in BayFish’s net income? (Hint: Use Incremental  approach table)

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