Question

Waterway Industries records purchases at net amounts. On May 5 Waterway purchased merchandise on account, $82000, terms 2/10, n/30. Waterway returned $7000 of the May 5 purchase and received credit on account. At May 31 the balance had not been paid. By how much should the account payable be adjusted on May 31

Answer 1

Answer:

$1,500

Explanation:

The computation of the amount adjusted on May 31 is shown below:

= (Purchase value of the merchandise - returned goods) × discount rate

= ($82,000 - $7,000) × 2%

= $1,500

The terms 2/10, n/30 represent the 2% discount is given if the payment is made within 10 days and the net days provided is 30 days

So, the amount adjusted is $1,500