Problem. What is the trade price of an invoice of $175.00 subject to discounts of 25%, 20%, and 10%? SOLUTION. $175 00 List price 25 First discount rate $131.25 After first discount $175.00 List price 43 75 First discount 131.25 After first discount $131.25 After first discount $105.00 After second discount Written Work Find the net cost of the following bills: 1. $45.00 less 20%, 15%, and 10%. 2. $28.00 less 25%, 10%, and 5%. 3. $70.00 less 30%, 20%, and 2%. 4. $105.50 less 20%, 12%, and 8%. 5. $39.80 less 15%, 10%, and 4%. 6. $2,806.75 less 28 %, 14%, and 2%. 7. $467.70 less 25%, 20%, and 9%. 8. $369.05 less 40 %, 20%, and 10%. 9. $294.46 less 33%, 20%, and 12%. 10. $723.34 less 37%, 10%, and 20%. 165. Computing a Single Rate Equivalent to a Series. To compute a single rate equivalent to a series: Subtract each rate from 100%; Find the product of these remainders; Problem. What single discount rate is equivalent to a trade discount of 20% and a cash discount of 2%? Problem. What single rate is equivalent to 25 %, 20%, and 10%? The buyers in some large business houses prepare an elaborate table similar to the one which follows. When manufacturers quote prices subject to a discount series, the buyers can tell by a glance at the table what single discount the series equals. Rule and complete the following table, using the method just explained to find single discounts equivalent to a discount series. TRADE CASH DISCOUNT, CASH DISCOUNT, CASH DISCOUNT, CASH DISCOUNT, CASH DISCOUNT, DISCOUNT 21% 1% 11% 2% 3% 18% 15 20 25 331 With the aid of the table, find the net price of the following: a. An invoice of $215, less 18% and 2%. b. An invoice of $464.20 less 18% and 3%. c. An invoice of $12.40 less 20 % and 14%. d. An invoice of $23.87 less 33% and 3%. Referring to the previous page; determine what single rate is equivalent to each series and compute the net amount of each bill using the single rates. Written Review 1. An implement dealer purchased the following invoice: Dated April 17. 4 No. 364 Plows, $38.75, less 20%. 7 Self Dump Hay Rakes, $20.50, less 18%. 7 No. 264 Hay Stackers, $41.50, less 15%. Terms, 2% for Cash in 20 days. Net 90 days. 2. Which of the following prices is better for the purchaser: $45, less 25%, 18%, and 2%; $60, less 28%, 25%, and 1%? 3. A merchant's discounts were 25% and 15%. A clerk sold an invoice of $72 and gave a single discount of 40%. How much did his error cost his employer? 4. A merchant lists a desk at $45 less 20 %. A competitor sells a similar desk for $48 less 333%. In order to meet his competitor's price, the first merchant decides to give an additional discount of %. 5. Hewett paid an invoice in time' to secure a discount of 3%. If the check sent was for $208.55, what was the list price of the invoice? 6. Graff Brothers sent a check to a wholesale house to pay an invoice. The check was for $801.90. What was the list price of the invoice if the discounts taken were 10% and 1%? 7. Compute the net price of an invoice of $100 subject to discounts. as follows: CHAPTER XVII RECORDING PURCHASES AND SALES MARKING GOODS 166. The Purchases Book. Merchants usually keep a record of purchases and sales. There are several different kinds of books used for this purpose. The following illustration shows a common form of the Purchases Book. The entries in the purchases book are made from the invoice received at the time of the purchase. The model shows proper record of the purchase made from Abercrombie & Co., as shown by the invoice on page 188. Notice that $23.86 is the amount of the invoice after deducting the trade discount of 18%. The cash discount is not deducted until the bill is paid. The terms are taken from the invoice. The discount term expires March 13. It is important to have this date recorded in the purchases book, as it is the last date on which payment may be made and the discount secured. April 2 is the day when the bill is due and payment is expected. No discount is allowed when payment is made between March 13 and April 2. 167. How to find the Date when an Invoice is Due. If the terms are stated in days, count the actual number of days. Thus, 30 days from March 3 is April 2. If the terms are stated in months, calendar months are counted. Thus, if the terms had been 2/10; N/1 month, the invoice would have been due on April 3. No entry is made in the "When and How Paid" column until the invoice is paid. It is not necessary to enter the items in the purchases book, because the invoice can be kept on file to supply this information. 168. The Sales Book. The following illustration shows a page from a commonly used form of sales book. The entries were made from the invoice on page 188. 169. Loose-leaf Sales Book. Many merchants record their sales in a loose leaf sales book. At the time the invoice is made, a carbon copy is also made. This requires very little extra labor, and the carbon copies, called "Charge Sheets," having holes punched at the side, can be bound together in a binder. The loose leaf sales book has several advantages. Both the invoice and the charge sheet, which forms the sales book, can be made on the typewriter at the same time; fraud is prevented because the invoices are numbered, and a clerk cannot sell goods and make an invoice without also making a charge slip. He cannot keep the money and destroy the charge slip because one of the numbered sheets would be missing, and the fraud would be apparent. The following illustration shows the charge sheet made as a carbon copy of the invoice shown on page 177. |