Question

A company purchased $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:

Answer 1

Answer:

The cash paid on June 24  is $8,754.25

Explanation:

The computation of the cash paid is shown below:

= (Merchandise purchase - returned goods) × ( 1 - discount rate)

= ($9,500 - $475) × ( 1 - 0.03%)

= $9,025  × 0.97

= $8,754.25

Since the company paid the amount within the discount period, so it can avail the discount benefit.

We deduct the discount rate from 1 as the percentage value is 100 so that accurate value can come.