Question

Sheridan Company sells merchandise on account for $5800 to Pharoah Company with credit terms of 1/10, n/30. Pharoah Company returns $1200 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

Answer 1

Answer:

check amount is $4,554

Explanation:

given data

sells  account = $5800

credit terms = 1/10, n/30

Company returns  = $1200

to find out

amount of the check

solution

we know here Net Sales  that is

Net Sales = sells  account - Company returns    ................1

put here value

Net Sales= $5,800 - $1200

Net Sales = $4,600

and

Discount will be here

Discount  = 1% of Net Sales

Discount  = $4,600 × 1%

Discount  = 46

so check amount  will be here

check amount = Net Sale - Discount

check amount = 4600 - 46

so that check amount is $4,554