Question

A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $500, was added to the invoice amount. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:

Answer 1

Answer:

the cash paid as on June 24 is $9,424

Explanation:

The computation of the cash paid as on June 24 is as follows:

= Merchandise cost + Freight charge - Purchase returns - Discount Eligible at 3%

= $10,000 + $500 - $800 - [($10,000 - $800) × 0.03]

= $10,000 + $500 - $800 - $276

= $9,424

Hence, the cash paid as on June 24 is $9,424