1. Cash Discounts: Other Methods
Mathematics of Buying
Cash Discounts: Other Methods

2. Solve Cash Discount Problems with EOM dating.
Objective
Solve Cash Discount Problems with EOM dating.

3. End-of-Month Dating Cash discount method End-of-Month (EOM) proximo
Objective 1
End-of-Month Dating
Cash discount method
End-of-Month (EOM)
proximo
3/10 EOM
3/10 prox.
3% discount on invoice if payment is made by the 10th of the month that follows sale.

4. End-of-Month Dating 1 of 2
Invoice is dated January 14.
Terms are 2/10 EOM
Final Discount date = _______
Net Payment date = _______
Feb. 10
Mar. 2
Jan. 14
Jan. 31
Feb. 10
Feb. 28
Mar 2 10 20 18 2

5. Practice
Ch 6, Section 4
Page 263
# 4
*Ch 6 Test
Page 271
#5, 7

6. End-of-Month Dating 2 of 2
If invoice is dated the 26th or later an extra month is added. Then count-off the 15 days…
Invoice is dated April 26.
Terms are 3/15 EOM
Final Discount date = _______
Net Payment date = ________
June 15
July 5
Apr 26
Apr 30
May 31
June 15
June 30
July 5 15 20 15 5

7. End-of-Month Dating: Summary
Objective 1
End-of-Month Dating: Summary
EOM Dating
Final Discount Date is determined by counting from the end of the month of the invoice date.
When the invoice is dated on the 26th or later, an extra month is added.
The Net Payment Due Date is 20 days after the last discount date.

8. Proximo Invoice Amt: $356.20 Invoice Date: May 17 Terms: 3/15 prox.
Date Invoice is paid: June 12
Amount of Discount = ________
Net due date = ________
Amount Due (if disc. earned) = ________
June 15
July 5
$ x .97
=$345.51
May 17
May 31
June 15
June 30
July 5 15 20 15 5

9. Receipt of Goods Dating
Objective
Receipt of Goods Dating

10. Receipt-of-Goods Method
Cash discount due dates are computed based upon when the goods are received.
Used when shipping times are lengthy.
3/15 ROG
June 20
June 30
July 5
Invoice Date: May 21
Terms: 3/15 ROG
Delivery Date: June 20
Discount Due Date = ________ 15 10 5
July 5

11. ROG Determine the final discount date for this problem.
Invoice Date: Jan. 15
Terms: 3/15 ROG
Good Received on: Feb. 5
Final discount date = ________
Net payment due date = ________
Feb. 20
Mar. 12
Feb 20
Feb 5
Feb 28
Mar 12 15 20 8 12

12. ROG Invoice Amt: $682.28 Invoice Date: June 4 Terms: 3/20 ROG
Delivery Date: July 25
Date Invoice is paid: August 10
Amount of Discount = __________________
Amount Due = _______________________
Extra: Net Payment Due Date = _____________
$ x 2% = $13.65
$ $13.65 = $668.63
Sept. 3
July 25
July 31
Aug 14
Aug 31
Sept. 3 20 6 14 20 17 3

13. ROG Summary
Receipt of goods method is used when shipping times are longer.
Final discount date is set based upon when the merchandise is received, not the invoice date.
Net payment due date is 20 days after the final discount date.

14. Practice
Ch 6, Section 4
page 263 #6
Ch 6 Test
page 271

15. Objective
Extra Dating Method

16. Extra Dating Method Extends the discount period.
Objective 3
Extra Dating Method
Extends the discount period.
Used as an incentive during a slow sales season.
Used to gain a competitive sales advantage.
2/10-50 extra
2/10-50 ex.
2/10-50 x

17. Extra Dating 1 of 2 Invoice Date: Nov 22 Terms: 1/10-20 x
Final Discount Date = ________
Net Payment Date = ________
Dec. 22
Jan. 11
Dec 2*
Nov 22
Dec 22
Dec 31
Jan 11
Jan 31
Nov 30 10 8 2 20 20 9 11

18. Extra Dating 2 of 2 Invoice Date: April 12 Terms: 3/15-50 ex.
Final Discount Date = ________
Net Payment Date = ________
June 16
July 6
Apr 27*
June 16
July 6
Apr 12
Apr 30
May 31
June 30 15 50 3 31 16 20 14 6

19. Practice
Ch 6, Section 4
page 263
#3, 5
Ch 6 Test
page 271 #8

20. Practice Ch 6, Section 4 Determine discount and amount due
Page 263
#9 – 13
Application Problems
Pages 264 – 265
#18 – 20, 25, 26

21. Determine credit given for partial payment of an invoice.
Objective 4
Determine credit given for partial payment of an invoice.

22. Objective 4
Partial Payments
Customers sometimes only pay a portion of what is owed.
If the partial payment is made within the discount period, they are entitled to a discount on the portion of the invoice that is paid.

23. Partial Payment Invoice amount: $200 Terms: 2/10
-$100
Invoice amount: $200
Terms: 2/10
Send in a partial payment of $100 within the cash discount period. What is the credit given?
$100 balance
100% 2%
98%
Credit Given – Cash Discount = Partial Payment Amount
Invoice Amt. – Cash Discount = Payment Amt.
???
$100

24. Partial Payments 1 of 3 100% 3% 97%
Objective 4
Partial Payments 1 of 3
Invoice: $100
Terms: 3/10
Partial Payment: $50
Credit Given = ?
100% 3%
97%
Credit Given – Discount = Partial Payment Amount
???
$50

25. Partial Payments 2 of 3 100% 5% 95%
Objective 4
Partial Payments 2 of 3
Invoice: $580
Terms: 5/15
Partial Payment: $200
Credit Given = ?
100% 5%
95%
Credit Given – Discount = Partial Payment Amount
???
$200

26. Partial Payments 3 of 3 Problem #23, page 251
Objective 4
Partial Payments 3 of 3
Problem #23, page 251
Mail Boxes Etc. receives an invoice amounting to $ with terms of 8/10, net 30 and dated AS OF September 1.
If a partial payment of $450 is made on Sept. 8, find
(a) the credit given for the partial payment
(b) the balance due on the invoice.

27. Partial Payments 3 of 3 Problem #23, page 251
Objective 4
Partial Payments 3 of 3
Problem #23, page 251
Mail Boxes Etc. receives an invoice amounting to $ with terms of 8/10, net 30 and dated AS OF September 1. If a partial payment of $450 is made on Sept. 8, find (a) the credit given for the partial payment and (b) the balance due on the invoice.

28. Partial Payments 3 of 3 Problem #23, page 251
Objective 4
Partial Payments 3 of 3
Problem #23, page 251
Mail Boxes Etc. receives an invoice amounting to $ with terms of 8/10, net 30 and dated AS OF September 1. If a partial payment of $450 is made on Sept. 8, find (a) the credit given for the partial payment and (b) the balance due on the invoice.
Balance Due = Invoice Amount – Credit Given
$183.17
$672.30
$489.13

29. Practice
MathXL: Chapter 6 Section 4 Homework