7. Given the following information, calculate, in order, the amount credited and the outstanding balance. Invoice: $1,000
Terms: 3/10, n/30
Invoice date: May 5
Payment amount: $800
Date paid: May 9
A. $265 26: $624 74
B. $176 00, $824 00
C. $824.74 $175.26
D. $724.74 $275 26

C. $824.74, $175.26

Step-by-step explanation:

1) Amount Credited

The formula to calculate the amount credited =

Amount paid ÷ ( 100% - Discount)

Discount is given in the question as 3/10

Where 3 = Discount rate

Amount paid = $800

Amount credited = 800/( 100% - 3%)

= 800/ 97%

= 800/ 0.97

= $824.74

b) Outstanding balance = Invoice - Amount credited

Invoice = $1000

Amount credited = $824.74

Outstanding balance = $1000 - $824.74

= $175.26