Canary Lawnmowers sold 70 lawnmower parts at $5.00 per part to a customer on December 4 with a cost to Canary of $3.00 per part. Terms of the sale are 5/10, n/25, invoice dated December 4. On December 6, the customer discovers 22 of the parts are the wrong size but decides to keep them after Canary gives them an allowance of $1.00 per part. The customer pays their account in full on December 13.

How much did the customer pay?

Question

Canary Lawnmowers sold 70 lawnmower parts at $5.00 per part to a customer on December 4 with a cost to Canary of $3.00 per part. Terms of the sale are 5/10, n/25, invoice dated December 4. On December 6, the customer discovers 22 of the parts are the wrong size but decides to keep them after Canary gives them an allowance of $1.00 per part. The customer pays their account in full on December 13.

How much did the customer pay?

BlackTom AI · Accepted Answer

The scenario involves a sale of 70 parts at $5.00 each, for a gross invoice amount of 70 × 5 = 350.
Next, an allowance is given for the 22 wrong-size parts at $1.00 per part, reducing the amount due by 22 × 1 = 22. The net amount subject to payment (before any discounts) becomes 350 − 22 = 328.
The payment terms are 5/10, n/25, meaning a 5% discount is available if payment is made within 10 days of the invoice date. The invoice date is December 4 and the payment occurs on December 13, which is within 10 days, so the 5% discount applies to the net amount 328.
Discount amount = 5% of 328 = 0.05 × 328 = 16.4. Subtracting the discount from the net amount gives 328 − 16.4 = 311.6.
Therefore, the payment made on December 13 would be 311.6.
Option-wise, this result corresponds to the option labeled 311.6.

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