Question

A company purchased $8,100 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $405 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: $7464

Explanation:

From the question, we are told that a

company bought $8,100 of merchandise on June 15 with terms of 3/10, n/45, on June 20, it returned $405 of that merchandise and on June 24, it paid the balance owed for the merchandise taking any discount it was entitled to.

The cash paid on June 24 goes thus:

Net purchase of returns will be:

= $8100 - $405

= $7695

The discount is 3% when made within 10days. Since there is a 4 days difference from June 20th to June 24th, the 3% discount is applicable, therefore the cash paid on June 24 will be:

= $7695 × (100% - 3%)

= $7695 × 97%

= $7695 × 0.97

= $7464