On August 6, A&B Construction Has Three Outstanding Invoices Payable

question 204

Short Answer

On August 6, A&B Construction has three outstanding invoices payable to Excel Builder's Supply. Invoice 535, dated July 16, is for $3,228.56; Invoice 598, dated July 24, is for $2,945.31; and Invoice 678, dated August 3, is for $6217.69. All invoices have terms 4/10, 2/20, n/60. If A&B makes a $10,000 payment to Excel on August 6, what further payment on August 15 will settle the account? Note that Excel applies payments to the oldest invoices first.

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Definitions:

Investing

The act of allocating resources, typically money, with the expectation of generating an income or profit over time through various instruments like stocks, bonds, or real estate.

Net Investment

The total amount of money spent on capital assets, minus depreciation. It reflects the increase in a company's or nation's capital stock.

Inventory Investment

Refers to the changes in the stock of goods that a company holds over a period, aiming to meet future sales demands or price changes.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.