Question

A company sells merchandise to a customer for $6,000 with terms 2/10, n/30 on June 1. What amount of cash will the merchandiser receive if the customer pays within the discount period?

Answer 1

Answer:

$5,880

Explanation:

The sales terms 2/10 n/30 means that if the customers pays within the discount period (10 days) he will get a 2% discount, but if the customer pays after that day and before a 30 period is over, he/she will pay the full invoice amount.

Since the customer paid within the discount period, the cash paid = $6,000 x (1 - 2%) = $6,000 x 98% = $5,880