Copyright © 2017 Cengage Learning
Level 2
Chapter 7 – Section I – Exercise 21
Using the Panorama Products invoice below, extend each line to the amount column and calculate the subtotal and total.
No. R-7431
Panorama Products Invoice Date
486 5th Avenue June 16, 200x
Eureka, CA 95501
Sold to:
J. M. Hardware Supply SAME
2051 West Adams Blvd.
Lansing, MI 48901
2″ Reflective Tape
Sand Paper Assorted
Masking Tape 1 1/2″ Standard
Unit Amount
16 cases 16 cases $21.90 $350.40
Shipped
Ordered
Customer’s
Order No.
12144
Masking Tape 1/2″ Standard
Quantity
Description
Masking Tape 1 1/2″ Standard
2″ Reflective Tape
Sand Paper Assorted
Quantity
Ordered
Shipped
Description
Customer’s
Order No.
12144
Masking Tape 1/2″ Standard
Level 3
Chapter 7 – Section II – Exercise 5
Calculate the trade discount if the list price is $88.25 and the trade discount rate is 50%.
Level 1
Chapter 7 – Section II – Exercise 17
Level 2
Chapter 7 – Section II – Exercise 18
Find the amount of a trade discount of 55% on a set of fine china that lists for $345.70.
Level 3
Chapter 7 – Section II – Exercise 26
You are the buyer for the housewares department of The Galleria Department Store. A
number of vendors in your area carry similar lines of merchandise. On sets of
microwavable serving bowls, Kitchen Magic offers a list price of $400 per dozen,
less a 38% trade discount. Pro-Chef offers a similar set for a list price of $425,
less a 45% trade discount.
a. Which vendor is offering the lower net price?
b. If you order 500 dozen sets of the bowls, how much money will be saved by using
the lower-priced vendor?
Level 1
Chapter 7 – Section III – Exercise 21
Lagacy Designs places an order for furniture listing for $90,500 less trade discounts
of 25/20.
a. What is the net price factor?
b. What is the net price of the order?
Level 2
Chapter 7 – Section III – Exercise 23
The Speedy Auto Service Center can buy auto parts from Southeast Auto Supply at
a series discount of 20/15/5 and from Northwest Auto Supply for 25/10/8.
a.Which auto parts supplier offers a better deal to Speedy?
b. If Speedy orders $15,000 in parts at list price per month, how much will they save
in a year by choosing the lower-priced supplier?
Level 1
Chapter 7 – Section II – Exercise 25
Midtown Market received the following items at a discount of 25/20/10:
18 cases of canned peaches listing at $26.80 per case and 45 cases of canned
pears listing at $22.50 per case.
a. What is the total list price of this order?
b. What is the amount of the trade discount?
c. What is the net price of the order?
Level 2
Chapter 7 – Section IV – Exercise 27
As part of the employment interview for an accounting job at Sound Design, you have
been asked to answer the questions below, based on an invoice from one of Sound
Design’s vendors, Target Electronic Wholesalers.
a. Extend each line and calculate the merchandise total and the total amount of the
invoice, using the space provided on the invoice.
b. What are the discount date and the net date if the shipment arrived on July 16?
c. While in transit, five Blu-ray players and four LCD TVs were damaged and will be
returned. What is the amount of the returned merchandise? What is the revised merchandise total?
d. What are the amount of the cash discount and the net amount due if the discount is
taken?
e. If Sound Design sends in a partial payment of $20,000 within the discount period,
what is the net balance still due?
Level 3
Chapter 7 – Assessment Test – Exercise 10
Leisure Time Industries sold Patio Magic Stores the following items, listed on an invoice:
40 Chaise lounges with armrests at $169.00 each
20 Chaise lounges without armrests at $127.90 each
24 Rocker Chairs at $87.70 each
3 dozen Plastic lounge covers at $46.55 per dozen
If the packing and handling charges were $125.00 and shipping cost $477.50, how
much should the invoice total be?
Level 1
Chapter 7 – Assessment Test – Exercise 14
Fantasia Florist Shop purchases an order of imported roses with a list price of $2,375 less
trade discounts of 15/20/20.
a. What is the amount of the trade discount?
b. What is the net amount of the order?
Level 2
Chapter 7 – Assessment Test – Exercise 17
a. What is the net price factor of the trade discount series 20/15/11?
b. What is the single equivalent discount?
Level 2
Chapter 7 – Assessment Test – Exercise 22
You are a salesperson for Victory Lane Wholesale Auto Parts. You have just taken a phone order from one
of your best customers, Champion Motors. Because you were busy when the call came in, you recorded
the details of the order on a notepad. Before the order can be processed, you must transfer your notes to
an invoice, extend each line, and calculate the total.
* The invoice date is April 4, 200x.
* The customer order no. is 443B.
* Champion Motors’ warehouse is located at 7011 N.W. 4th Avenue, Columbus, Ohio 43205.
* Terms of sale — 3/15, n/45.
* The order will be filled by D. Watson.
* The goods will be shipped by truck.
* Champion Motors’ home office is located next to the warehouse at 7013 N.W. 4th Avenue.
* Champion ordered 44 car batteries, stock #394, listing for $69.95 each, and 24 truck
batteries, stock #395, listing for $89.95 each. These items get trade discounts of 20/15.
* Champion also ordered 36 cases of 10W/30 motor oil, stock #838-W, listing for
$11.97 per case, and 48 cases of 10W/40 super-oil, stock #1621S, listing for $14.97
per case. These items get trade discounts of 20/20/12.
* The freight charges for the order amount to $67.50.
* Insurance charges amount to $27.68.
A late fee of 5% is charged if the invoice is paid after the due date.
b. What is the discount date of the invoice?
c. If Champion sends a partial payment of $1,200 by the discount date, what is the balance
due on the invoice?
d. What is the net date of the invoice?
e. Your company has a policy of charging a 5% late fee if invoice payments are more than
five days late. What is the amount of the late fee that Champion will be charged if it fails
to pay the balance due on time?