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Accounts payable calculations and discounts

You work in the Accounts Payable Department in a small company. One of your duties is to determine payment dates for invoices to take advantage of discounts offered by vendors. You then file the invoices by payment date in a tickler file. You check the tickler file each day to see what invoices should be paid in the next couple of days. This ensures that payments are made within the discount periods and saves money for the company.

1. Determine the payment dates for each invoice according to terms given. For example, terms 2/10, net 30 means that a 2 percent discount may be taken if the invoice is paid within 10 calendar days of the invoice date. If the invoice is dated June 1, the payment date would be June 11. Terms net 30 mean no discount is available, and the invoice should be paid in 30 days.

2. Determine the filing order of the invoices, arranging the invoices chronologically by payment date. If more than one invoice has the same payment date, arrange them alphabetically by company name.

3. For checking purposes, indicate the order of the invoices by listing their item numbers.

ITEM COMPANY NAME INVOICE DATE TERMS
1 . Centrex Systems May 18 2/10 net 30
2. James Office Supply June 6 1/10 net 30
3. Frank Brothers, Inc. May 22 1/10 net 30
4. Caldwell Industries July 2 2/10 net 30
5. Baker and Sons June 9 1/10 net 30
6. Rodriguez and Parker June 9 net 30
7. Ralston, Inc. July 2 1/10 net 30
8. Ace Plumbing May 18 2/10 net 30
9. 5 Star Producers July 2 1/10 net 30
10. Paragon Cable June 6 2/10 net 30
11 . All State Products May 18 net 30
12. Freedom Motors May 2 net 30
13. Franklin Associates May 22 1/10 net 30
14. Rodgers Design June 30 1/10 net 30
15. Bakersfield Market May 20 net 30.

Solution Preview

ITEM COMPANY NAME INVOICE DATE TERMS
1. Ace Plumbing May 18 2/10 net 30 May 28
2 . Centrex Systems May 18 2/10 net 30 May 28
3. Frank Brothers, Inc. May 22 1/10 net 30 June 1
4. ...

Solution Summary

The solution determines the accounts payable calculations and discounts.

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