Question

Vail Ski Shop received a $1,201 invoice dated July 8th wiht 2/10, 1/15, n/60 terms. On July 22, Vail sent a $485 partial payment. What credit should Vail receive? What is Vail's outstanding balance?

Answer 1

The given information is,

V received a dated July with terms.

On July Vail sent a Partial payment.

The last day of discount period is,

So, within the discount period they paid the payment.

First we need to calculate the complement of a discount rate.

The complement of a discount rate is,

Hence, the compliment of the discount rate is 0.99

The credit received is obtained by dividing the partial payments by the complement of a discount rate.

So, credit received is calculated as,

To get the outstanding balance, mow we need to subtract credited balance from the total due

Now outstanding balance is

Hence, the credit received by V is and the outstanding balance is.