Hundredweight. Kilogram. What word is represented by each of the following abbreviations? T7-1 REVIEW EXERCISES CHAPTER 7 SECTION I

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1 T7-1 REVIEW EXERCISES CHAPTER 7 SECTION I What word is represented by each of the following abbreviations? 1. bx. Box 2. pt Pint 3. drm. Drum 4. kg 5. gro. Gross 6. oz Ounce 7. M. Thousand 8. cwt Kilogram Hundredweight

2 T7-2 REVIEW EXERCISES CHAPTER 7 SECTION I Using the Frasier invoice on page 210, extend each line to the amount column and calculate the subtotal and total. Then answer questions (Note: Although 26 boxes of 2-inch reflective tape were ordered, only 11 boxes were shipped. Charge only for the boxes shipped.) 9. Seller Frasier Manufacturing 10. Invoice number R Invoice date June 16, 200x 12. Cust. order # Buyer J. M. Hardware Supply 14. Terms of sale Net 30 days 15. Shipping address 2051 W. Adams Blvd. Lansing, MI Salesperson H. Marshall 17. Shipped via Gilbert Trucking 18. Insurance None listed 19. Freight charges $ Unit price 2" Tape $ Invoice subtotal $4, Invoice total $4, " Tape $ Subtotal $4, Freight " Tape Total $4, " Tape Sandpaper 2, Subtotal $4,415.12

3 T7-3 BUSINESS DECISION CHAPTER 7 SECTION I

4 T7-4 BUSINESS DECISION CHAPTER 7 SECTION I

5 T7-5 REVIEW EXERCISES CHAPTER 7 SECTION II Calculate the following trade discounts. Round all answers to the nearest cent. List Price Trade Discount Rate Trade Discount 1. $ % Trade discount 5 $ % Trade discount 5 $ % Trade discount 5 $ % $ $ $15.06 $15.06 $7.93 $7.93 $39.92 Trade discount 5 $ $ % $44.13 Trade discount 5 $ $44.13

6 T7-6 REVIEW EXERCISES CHAPTER 7 SECTION II Calculate the following trade discounts and net prices to the nearest cent. Trade Trade List Price Discount Rate Discount Net Price Net Price 6. $ % % % $71.50 $53.92 $3.83 $ $80.87 $ % $ $ $ $ $ $80.87 $ $17.46 $ $ Trade Discount $ $71.50 $ $ $53.92 $3.83 $ $527.45

7 T7-7 REVIEW EXERCISES CHAPTER 7 SECTION II Calculate the following net price factors and net prices by using the complement method. Round all answers to the nearest cent. List Price Trade Discount Rate Net Price Factor Net Price 10. $3, % % 12. 1, % % % 76% 54.2% 87.25% $2, $ $ $4.01 Calculate the following trade discounts and trade discount rates. Round answers to the nearest tenth percent. List Price Trade Discount Trade Discount Rate Net Price 14. $4, $ % $3, $ % $ % 2.15

8 T7-8 REVIEW EXERCISES CHAPTER 7 SECTION II 17. Find the amount of the trade discount on a television set that has a list price of $ less a trade discount of 30%. Trade discount 5 List price 3 Trade discount rate Trade discount 5 $ $ Find the amount of the trade discount on a set of fine china that lists for $ less 55%. Trade discount 5 $ $ What is the amount of the trade discount offered to a shoe store for merchandise purchased at a total list price of $7,800 less a trade discount of 25%? Trade discount 5 $7, $1, Bay Street Market ordered twelve cases of soup with a list price of $18.90 per case, and eight cases of baked beans with a list price of $33.50 per case. The wholesaler offered a 39% trade discount to Bay Street Market. a. What is the total extended list price of the order? $ $ Total extended list price 5 $ b. What is the total amount of the trade discount on this order? Trade discount 5 $ $ c. What is the total net amount Bay Street Market owes the wholesaler for the order? Net Amount 5 $ $301.83

9 T7-9 REVIEW EXERCISES CHAPTER 7 SECTION II 21. Kalaidoscope for Kids, a chain of clothing stores, purchased merchandise with a total list price of $25,450 from Sandy Sport, a manufacturer. The order has a trade discount of 34%. a. What is the amount of the trade discount? Trade discount 5 $25, $8, b. What is the net amount Kalaidoscope owes Sandy Sport for the merchandise? Net price 5 $25, , $16, An item with a trade discount of 41% has a list price of $ What is the net price? Net price factor % Net price 5 $ $ Nathan and David Beauty Salon places an order for beauty supplies from a wholesaler. The list price of the order is $2,800. If the vendor offers a trade discount of 46%, what is the net price of the order? Net price factor 5 100% 2 46% 5 54% Net price 5 $2, $1,512.00

10 T7-10 REVIEW EXERCISES CHAPTER 7 SECTION II 24. A watch has a list price of $ and can be bought by Sterling Jewelers for a net price of $ a. What is the amount of the trade discount? Trade discount amount 5 $ $ b. What is the trade discount rate? Trade discount rate % 25. You are the buyer for the housewares department of a large department store. A number of vendors in your area carry similar lines of merchandise. On sets of microwavable serving bowls, Kitchen Magic offers a list price of $400 per dozen, less a 38% trade discount. Pro-Chef offers a similar set for a list price of $425, less a 45% trade discount. a. Which vendor is offering the lower net price? Kitchen Magic Pro-Chef $ ( ) ( ) Net price per dozen 5 $ Net price per dozen 5 $ Pro-Chef has a lower price. b. If you order 500 dozen sets of the bowls, how much money will be saved by using the lower-priced vendor? , , , , $7, Savings

11 T7-11 BUSINESS DECISION CHAPTER 7 SECTION II QUANTITY DISCOUNT 26. You are the purchasing manager for VisionMaster, a company that manufactures scanners and other computer peripherals. Your vendor for scanner motors, Enfield Industries, is now offering quantity discounts in the form of instant rebates and lower shipping charges, as follows: Quantity Net Price Rebate Shipping motors $16 none $ ,000 motors 16 $ ,001 2,000 motors a. Calculate the cost of the motors, including shipping charges, for each category $ ,000 5 $ ,001 2,000 5 $14.80 b. If you usually purchase 400 motors per month, what percent would be saved per motor by ordering 800 every two months? Round to a tenth percent % c. What percent would be saved per motor by ordering 1,200 every three months? Round to a tenth percent % d. How much money can be saved in a year by purchasing the motors every three months instead of every month? ,800 motors per year 4, $12,000 Savings e. (Optional) What other factors, besides price, should be considered before changing your purchasing procedures? Answers will vary: cost of warehousing and insuring the extra motors, prices falling in the future, new models coming out

12 T7-12 REVIEW EXERCISES CHAPTER 7 SECTION III Calculate the following net price factors and net prices. For convenience, round net price factors to five decimal places when necessary: List Price Trade Discount Rates Net Price Factor Net Price 1. $ / /15/ /10/ /10/ /15/ $ $ $52.97 $ $ /9/ $ Net price factor 100% 12% % 10% Net price $ Net price factor Net price $ Net price factor Net price $ Net price factor Net price $ Net price factor Net price $ Net price factor Net price $.26

13 T7-13 REVIEW EXERCISES CHAPTER 7 SECTION III Calculate the following net price factors and single equivalent discounts. Round to five places when necessary. Trade Single Discount Net Price Equivalent Rates Factor Discount Net Price Factor Single Equivalent Discount 7. 15/ /15/ /15/ /5/ /15/

14 T7-14 REVIEW EXERCISES CHAPTER 7 SECTION III Complete the following table. Round net price factors to five decimal places when necessary. Trade Single Discount Net Price Equivalent Trade List Price Rates Factor Discount Discount Net Price 12. $7, /5/ , /15/ /15/ /12/ /10/ $1, $5, $ $ $ $ $ $ $1.40 $ , /20/ $1, $1, Single Net Price Equivalent Trade Factor Discount Discount Net Price $7, $1, $7, $5,983.61

15 T7-15 REVIEW EXERCISES CHAPTER 7 SECTION III 18. What is the net price factor of a 25/10 series of trade discounts? 25/10 : Net price factor What is the net price factor of a 35/15/10 series of discounts? 35/15/10 : Net price factor Toy Town orders toys, games, and videos with a list price of $10,300 less trade discounts of 25/15/12. a. What is the net price factor? Net price factor b. What is the net price of the order? Net price 5 10, $5, Contempo Designs places an order for furniture listing for $90,500 less trade discounts of 25/20. a. What is the net price factor? Net price factor b. What is the net price of the order? Net price 5 90, $54,300.00

16 T7-16 REVIEW EXERCISES CHAPTER 7 SECTION III 22. If a supplier offers you trade discounts with a net price factor of.5788, what is the single equivalent discount? Single equivalent discount A vendor offers trade discounts of 25/15/10. a. What is the net price factor? Net price factor b. What is the single equivalent discount? Single equivalent discount Audio Giant received an order of satellite radios listing for $9,500 and trade discounts of 25/13/8. a. What is the net price factor? Net price factor b. What is the single equivalent discount? Single equivalent discount c. What is the amount of the trade discount? Trade discount 5 9, $3, d. What is the net price of the order? Net price 5 9, $5,702.85

17 T7-17 REVIEW EXERCISES CHAPTER 7 SECTION III 25. Shari s Boutique is offered a line of blouses that list for $700 per dozen from a clothing manufacturer. They are offering trade discounts of 35/25/5. a. What is the net price per dozen Shari will pay for the blouses? $ Per dozen b. What is the single equivalent discount of this deal? Single equivalent discount The Speedy Auto Service Center can buy auto parts from Southeast Auto Supply at a series discount of 20/15/5 and from Northwest Auto Supply for 25/10/8. a. Which auto parts supplier offers a better deal to Speedy? Southeast Northwest Single equivalent discount Single equivalent discount Northwest offers a better discount. b. If Speedy orders $15,000 in parts at list price per month, how much will they save in a year by choosing the lower-priced supplier? Southeast Northwest $15, $15, $9, $9, , , $ $4, Savings per year 27. Toshiba offers wholesalers a series discount of 35/20/20 and retailers a series discount of 35/20. A television set has a list price of $560. a. What is the price the wholesaler pays? $ $ b. What is the price to the retailer? $ $291.20

18 T7-18 REVIEW EXERCISES CHAPTER 7 SECTION III 28. Taylor Pharmacy buys merchandise from B. G. Distributors with a series discount of 35/15/7. a. What is the single equivalent discount? b. What is the amount of the trade discount on an order with a list price of $5,700? $5, $2, Certified Food Distributors received the following items at a discount of 25/20/10: 18 cases of canned peaches listing at $26.80 per case and 45 cases of canned pears listing at $22.50 per case. a. What is the total list price of this order? $ $ $ $1, Total list price $1, b. What is the amount of the trade discount? $ c. What is the net price of the order? Net price 5 $1, $ Net price factor Single equivalent discount Trade discount

19 T7-19 REVIEW EXERCISES CHAPTER 7 SECTION III 30. Shopper s Mart purchased the following items. Calculate the extended total after the trade discounts for each line, the invoice subtotal, and the invoice total: Trade Extended Quantity Unit Merchandise Unit List Discounts Total 150 ea. Blenders $ /15/15 5, ea. Toasters /10/10 10, doz. Coffee Mills /9/7 2, doz. Juicers /10/5 Invoice subtotal 3, , Extra 5 1 % volume discount on total order 21, Invoice total 20, Co Blenders $ 5, Toasters $10, Coffee mills $ 2, Juicers $ 3,539.70

20 T7-20 BUSINESS DECISION CHAPTER 7 SECTION III NEGOTIATE AND SAVE 31. Referring back to Exercise 30, you have just been hired as the new buyer for the kitchen division of Shopper s Mart, a general merchandise retailer. After looking over the discounts offered to the previous buyer by the vendor, you decide to ask for better discounts. After negotiating with the vendor s salesperson, you now can buy blenders at trade discounts of 20/20/15, and juicers at 25/15/10. In addition, the vendor has increased the 1 volume discount to 6 2%. a. How much would have been saved with your new discounts, based on the quantites of the previous order (Exercise 30)? Blenders 4, Toasters 10, Coffee mills 2, Juicers 3, % 21, , , , $ Original net New net Savings b. As a result of your negotiations, the vendor has offered an additional discount of 2% of the total amount due if the invoice is paid within 15 days instead of the usual 30 days. What would be the amount of this discount? 19, $392.72

21 T7-21 REVIEW EXERCISES CHAPTER 7 SECTION IV Calculate the cash discount and the net amount due for each of the following transactions: Amount of Terms of Cash Net Invoice Sale Discount Amount Due 1. $15, /15, n/ , /10, n/ , /10, n/ , /10, n/ , /15, n/ $ $ $96.84 $ $ $15, $12, $2, $6, $8, For the following transactions, calculate the credit given for the partial payment and the net amount due on the invoice: Amount of Terms of Partial Credit for Net Invoice Sale Payment Partial Payment Amount Due 6. $8, /10, n/30 $2,500 $2, $5, , /10, n/ $ $ , /15, n/60 3,200 $3, $2, , /20, n/45 5,500 $5, $1,472.92

22 T7-22 REVIEW EXERCISES CHAPTER 7 SECTION IV 1. CD 5 $15, $ NAD 5 $15, $ $15, CD 5 $12, $ NAD 5 $12, $ $12, Credit for partial payment 5 $2, NAD 5 $8, $2, $2, $5, Credit for partial payment 5 $ $ CD 5 $2, $96.84 NAD 5 $2, $ $2, CD 5 $6, $ NAD 5 $6, $ $6, NAD 5 $1, $ Credit for partial payment 5 $3, NAD 5 $5, $3, $ $3, $2, CD 5 $9, $ NAD 5 $9, $ $8, Credit for partial payment 5 $5, $5, NAD 5 $7, $5, $1,472.92

23 T7-23 REVIEW EXERCISES CHAPTER 7 SECTION IV Using the ordinary dating method, calculate the discount date and the net date for the following transactions: Date of Invoice Terms of Sale Discount Date(s) Net Date 10. November 4 2/10, n/ April 23 3/15, n/ August 11 3/20, n/ January 29 2/10, 1/20, n/60 Nov. 14 May 8 Aug. 31 2% 1% Feb. 8, Feb. 18 Dec. 19 June 22 Sept. 25 Mar July 8 4/25, n/90 Aug. 2 Oct. 6

24 T7-24 REVIEW EXERCISES CHAPTER 7 SECTION IV Using the EOM, ROG, and Extra dating methods, calculate the discount date and the net date for the following transactions. Unless otherwise specified, the net date is 20 days after the discount date: Date of Invoice Terms of Sale Discount Date Net Date 15. December 5 2/10, EOM 16. June 27 3/15, EOM 17. September 1 3/20, ROG Rec d Oct February 11 2/10, 60 Extra 19. May 18 4/25, EOM 20. October 26 2/10, ROG Jan. 10 Aug. 15 Oct. 23 Apr. 22 June 25 Jan. 30 Sept. 4 Nov. 12 May 12 July 15 Rec d Nov. 27 Dec. 7 Dec. 27

25 T7-25 REVIEW EXERCISES CHAPTER 7 SECTION IV 21. The Apollo Company received an invoice from a vendor on April 12 in the amount of $1, The terms of sale were 2/15, n/45. The invoice included freight charges of $108. The vendor sent $250 in merchandise that was not ordered. These goods will be returned by Apollo. (Remember, no discounts on freight or returned goods.) a. What are the discount date and the net date? Discount date Net date April days 5 April 27 April days 5 May 27 b. What is the amount of the cash discount? Cash discount $1, $ $ $1, , $21.24 c. What is the net amount due? $1, $21.24 Net amount due 5 $1, Freight $1, An invoice is dated August 29 with terms of 4/15 EOM. a. What is the discount date? b. What is the net date? October 15 October days 5 November An invoice dated January 15 has terms of 3/20 ROG. The goods are delayed in shipment and arrive on March 2. a. What is the discount date? b. What is the net date? March 22 March days 5 April 11

26 T7-26 REVIEW EXERCISES CHAPTER 7 SECTION IV 24. What payment should be made on an invoice in the amount of $3,400 dated August 7 if the terms of sale are 3/15, 2/30, n/45 and the bill is paid on a. August 19? August 7 to August days This is within 3% discount period. $3, $ $3, $ $3, on August 19 b. September 3? August 7 to September days This is within 2% discount period. $3, $68.00 $3, $ $3, on September City Cellular purchased $28,900 in camera phones on April 25. The terms of sale were 4/20, 3/30, n/60. Freight terms were F.O.B. destination. Returned goods amounted to $650. a. What is the net amount due if City Cellular sends the manufacturer a partial payment of $5,000 on May 20? April 25 to May days This is within 3% discount period. $28, $ $28, Invoice less returns Partial payment credit 5 5, $5, $28, $5, $23, Net due b. What is the net date? April days 5 June 24 Net date 5 June 24 1 c. If the manufacturer charges a 4 2% late fee, how much would City Cellular owe if they did not pay the balance by the net date? Net due on net date 5 $23, $23, $1, Late fee 1 1, $24, Net due after net date

27 T7-27 BUSINESS DECISION CHAPTER 7 SECTION IV

28 T7-28 BUSINESS DECISION CHAPTER 7 SECTION IV

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