Dating

DATING Dating is an agreement whereby a specified time period for payment of an invoice is arranged. The type of dating arrangement varies within a particular industry to another. 2/10 net 30 (n/30) would mean that a 2%discount off the billed cost is permitted if the invoice is paid with in 10 days. Following the date of invoice,the payment of the net amt(total amt of billed cost) is required between the 11th and the 30th day following the date of the invoice.

Problem An invoice dated march 1, for 10 chairs at a cost of $24 each,carries terms of 2/10 net 30. If the bill is paid on any day from march 1 to march 11, 2% may be deducted . $24 each x 10 quantity ---------------------------$240 total cost $240 billed cost x 2% cash discount ------------------------------$4.80 Cash Discount billed cost =$240 -- cash discount =$4.80 ---------------------------------NET COST =$235.20 However, if the bill is paid on or after March 12, the full amount of $240 is due.

Problem

Date of Invoice

last date first date last date penalty for for net for net period discount payment payment starts --------------------------------------------------------------March 1 March 11 March12 March 31 April 1 {-Discount Period-} {----------Net Period----------}

C.O.D. Dating Cash-on-delivery dating is a type of dating that means payment must be “on the spot” as delivery takes place. Goods valued at $500 cost are purchased by a retail store and dating terms. What is the amt remitted? When? invoiced amount =$500 Amount remitted =$500 when = As delivery takes place .

Regular Dating Is one of the most common kinds of dating. The discount is calculated from the date of the invoice which usually is the same date merchandise is shipped. What payment should be made on an invoice for $500 dated Nov 14 carrying terms of 4/10 net 30?

Regular Dating  If paid on or before Nov 26: $500 billed cost -20 cash discount(500x 4%) ------$480 remitted If paid between Nov 27 and Dec 16 (20 day net payment period), no discount is permitted and the full $500 is remitted.

Extra Dating(X)  Calculated from date of invoice,with a specified no of extra days granted during which time the discount may be taken. Thus 2/10-60X means that the bill is payable in 10 days plus 60 extra days(a total of 70 days} from the date of the invoice in order to earn the 2% discount. The full amount is due after the expiration of 70 days. Often unstated 20 day additional net payment

Extra Dating 1. An invoice dated March 16 has a billed cost of $1800 and terms 3/10-60X. Determine: c. Final date for taking cash discount. d. Cash discount earned if bill is paid June 14. c. Amount due if bill is paid in full on April 17. d. Net payment date.

Extra Dating a.

Final date for cash discount : March 16 through 31 = 15 days April entire month = 30 days May 1 through 25 = 25 days END OF DISCOUNT PERIOD = May25=70days f. None g. Eligible for cash discount: $1800 BILLED COST -- 54 (CASH DISCOUNT $1800 X 3 %) -----------$1746 amount due l. Last date for net payment = 20 days after May 25 = June 14

E.O.M. Dating End of month means that the cash discount period is computed from the end of the month in which the invoice is dated rather than from the date of the invoice itself.8/10E.O.M.(invoice dated April 1) means that the time for payment is calculated from the end of April, and an 8% cash discount may be taken if the bill is paid by May 10,ten days after the end of April. Once again a twenty day net period occurs from May11 through May 31during which time the retailer may pay the bill in full.

E.O.M. Dating

Under this dating only invoices dated after the 25th of any month are considered to be part of the next month’s transaction. A bill with 8/10 E.O.M. dated on the Aug 26,is handled as a Sep 1 bill and the discount period extends to October 10.

E.O.M. Dating An invoice for $1000 dated March 17 has terms of 8/10 E.O.M. a. What is the last date for the legally deducting 8% cash discount? b. what amt will be due if the bill is paid on that date?

E.O.M. Dating a. Discount date = April 10(ten days after end of march) b. $1000 billed cost - 80 cash discount ($1000 x 8%) ---------------------------------$920 amount due

R.O.G. DATING  Receipt of goods dating, the discount period is calculated from the date of the goods arrive at the retailers premises,rather than the invoice date.this type of dating is often requested by the buyers located at a distance.

R.O.G. DATING An invoice for $100 is dated April 4 and carries terms of 5/10 R.O.G. the goods arrive in the store on May 7. a. what is the last date that the discount may be deducted? b.how much should be remitted if payment is made on that date?

R.O.G. DATING a. Add ten days to the date goods were received; May 7 plus 10 days = May17 Last day for discount = May17 b. Amount to be remitted before May17=$95

Advanced Dating (AS OF) Time for payment is calculated from specified future date that is neither the date of the invoice nor the date the goods are received. This is generally done so that additional time is allowed for the payment to be made and for the cash discount to be deducted. If shipment were made on Feb 10 and the invoice date were May 1 terms 2/10 would mean that the payment was due on May 11 or sooner with a 2% cash discount.

Problem A buyer receives an invoice for $500; assuming the buyer paid on time , calculate b. The last day on which the cash discount may be taken c. The amount to be remitted if the discount is taken

Terms

Invoice Date

Date Merchandise Is received

a.

Feb 6

Feb 11

3/10, n/30

b.

Aug 18

Aug 29

3/10 ROG

c.

July 10

July15

8/10 EOM

d.

Oct 15

Oct 20

6/10-30X

e.

March 28

April 3

8/10 EOM

f.

July 5

July 11

6/10-60X

g.

Dec 3

Dec 7

1/10, n30

h.

Sep 19

Sep 30

3/10 ROG

i.

May 29

June 5

8/10 EOM

j.

July 5

July 23

6/10 as of Oct 1

k.

May 14

May 21

3/10 EOM

l.

Dec 1

Dec 5

1/10, n/30

m.

July 25

Aug 2

6/10 as of Nov 1

n.

June 28

July 8

3/10-40X

o.

Jan 18

Jan 24

6/10 ROG

Cash Discount date

Amt Due