ABC Corporation purchases $100,000 worth of inventory on credit terms of 2/10, n/30. On the tenth day
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ABC Corporation purchases $100,000 worth of inventory on credit terms of 2/10, n/30. On the tenth day after the purchase, ABC Corporation pays off $40,000 of the balance. On the 30th day, ABC Corporation pays the remainder of the balance. What is the cost of the inventory assuming that ABC Corporation takes advantage of the discount? What is the effective annual interest rate (EAR) of the discount?
Related Book For
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
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