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Nido Co. has a standing agreement with a supplier for purchasing car parts. The terms of the agreement are 3/15, n/30 from the invoice date of September 1. The company makes a purchase on September 1 for $5,000 and pays the amount due on September 13. What amount does Nido Co. pay in cash on September 13? A. $5,000 B. $4,850 C. $150 D. $4,250

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 12, Problem 5MC
Textbook Problem
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Nido Co. has a standing agreement with a supplier for purchasing car parts. The terms of the agreement are 3/15, n/30 from the invoice date of September 1. The company makes a purchase on September 1 for $5,000 and pays the amount due on September 13. What amount does Nido Co. pay in cash on September 13?

A. $5,000

B. $4,850

C. $150

D. $4,250

To determine

Concept introduction:

Purchase terms may contain the cash discount for early payment of the credit purchase. For example: a ter. 2/10, n 30 means there shall be a 2% discount allowed if the payment is made within 10 days and the total credit period allowed is 30 days.

To choose:

The amount to be paid in cash.

Explanation of Solution

The amount to be paid in cash is calculated as follows:

The payment for purchase is made within t...

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Chapter 12 Solutions

Principles of Accounting Volume 1
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