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emmasim [6.3K]
3 years ago
12

Windsor, Inc. sells merchandise on account for $3700 to Morton Company with credit terms of 2/10, n/30. Morton Company returns $

800 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Windsor, Inc. make upon receipt of the check?
Business
1 answer:
IrinaK [193]3 years ago
7 0

Answer:

Dr. Cash                          $2,842

Dr. Discount Expense    $58

Cr. Account Receivable $2,900

Explanation:

Terms 2/10, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.

Sales = $3,700

Returns = $800

Amount Due = $3,700 - $800 = $2,900

As the payment is made within discount period, so discount will be availed

Discount = $2,900 x 2% = $58

Cash Paid = $2,900 - $58 = $2,842

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