Question 7.4.6: An invoice from Wind Turbines & Solar, Inc., is dated Au......

Step 1 The last day to take the 3% cash discount is September 14 (August 5 + 40 days = September 14). Since the invoice is paid on September 12, the 3% discount may be taken.

Step 2 The 3% cash discount is computed on $8180, the amount of the invoice. The discount to be taken is $245.40.

Step 3 Subtract the cash discount from the invoice amount to determine the amount of payment.

\begin{matrix} \ \ \ \ \ \ \ \ \ \ \ \$8180.00 & invoice\ amount \ \ \ \ \ \\ \ \ \ \ \ \ \underline{-\ \ \ \ \$245.40} & \mathbf{3\%\ cash\ discount}\\ \ \ \ \ \ \ \ \ \ \ \ \$7934.60&\ amount\ of\ payment \end{matrix}