cash discounts: other methods. solve cash discount problems with eom dating
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Cash Discounts: Other Methods
Solve Cash Discount Problems with EOM dating.
End-of-Month DatingCash 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.
Objective 1
End-of-Month Dating 1 of 2
Invoice is dated January 14.Terms are 2/10 EOM
Final Discount date = _______Net Payment date = _______
18
Jan. 14 Mar 2
10
Jan. 31 Feb. 28Feb. 10
20
2
Feb. 10Mar. 2
PracticeCh 6, Section 4
Page 263# 4
*Ch 6 Test Page 271#5, 7
End-of-Month Dating 2 of 2
Invoice is dated April 26. Terms are 3/15 EOM
Final Discount date = _______Net Payment date = ________
Apr 26 Apr 30 May 31
15
June 15
20
June 30
15 5
July 5
If invoice is dated the 26th or later an extra month is added. Then count-off the 15 days…
June 15
July 5
End-of-Month Dating: SummaryEOM 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.
Objective 1
ProximoInvoice Amt: $356.20Invoice Date: May 17Terms: 3/15 prox.Date Invoice is paid: June 12
Amount of Discount = ________Net due date = ________Amount Due (if disc. earned) = ________
15
May 17 July 5
15
May 31 June 30June 15
20
5
June 15
July 5$356.20 x .97 =$345.51
Receipt of Goods Dating
ROGDetermine the final discount date for this problem.Invoice Date: Jan. 15Terms: 3/15 ROGGood Received on: Feb. 5
Final discount date = ________Net payment due date = ________
Feb 5
15
Feb 28 Mar 12
8 12
20
Feb 20
Feb. 20
Mar. 12
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 = _____________
July 25
20
July 31 Aug 14
6 14
20
Sept. 3Aug 31
17 3
$682.28 x 2% = $13.65
Sept. 3
$682.28 - $13.65 = $668.63
ROG SummaryReceipt 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.
PracticeCh 6, Section 4
page 263#6
Ch 6 Testpage 271#6
Extra Dating Method
Extra Dating MethodExtends 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
Objective 3
Extra Dating 1 of 2
Invoice Date: Nov 22Terms: 1/10-20 x
Final Discount Date = ________Net Payment Date = ________
Nov 22
10
Nov 30 Dec 22Dec 2*
Dec 31
208 2
Jan 31
20
9 11
Jan 11
Dec. 22
Jan. 11
Extra Dating 2 of 2
Invoice Date: April 12 Terms: 3/15-50 ex.
Final Discount Date = ________ Net Payment Date = ________
Apr 12
15
Apr 30Apr 27*
May 31
50
313
June 30
20
14 6
16
June 16 July 6
June 16
July 6
PracticeCh 6, Section 4
page 263#3, 5
Ch 6 Testpage 271#8
PracticeCh 6, Section 4Determine discount and amount due
Page 263#9 – 13
Application ProblemsPages 264 – 265#18 – 20, 25, 26