What amount should be remitted to the vendor for merchandise listed below? Quantity Item List Price 18 Billfold $25.00 each 6 Glasses case $15.00 each 21 French purse $30.00 each 9 Key case $12.50 each The invoice is dated September 18 and paid on October 12. Trade discounts are 40% and 15%; terms are 3/10 EOM, FOB store. The vendor has paid transportation charges of $13.84.

The amount that should be remitted to the vendor for merchandise is:

=  $1,103.98

Explanation:

a) Data and Calculations:

Quantity  Item                  List Price          Item Amount

18             Billfold              $25.00 each      $450

6             Glasses case   $15.00 each           90

21             French purse  $30.00 each        630

9              Key case          $12.50 each          112.50

Total amount of items                             $1,282.50

Trade discount (15%)                                    192.38

Amount due to be remitted                       1,090.12

b) The trade discount is taken to be 15%. The credit term indicates "3/10 EOM, FOB store."  These terms imply that 3% discount would be granted if payment is made within 10 days.  The credit period is till the end of the month (EOM).  Another implication is that the transportation charges of $13.84 would be borne by the vendor and not the buyer (FOB store).  FOB store means Free on Board, meaning that the vendor bears full responsibility for the goods until they are delivered to the buyer at her store.

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