Answer:
C) 2,554
Explanation:
When a company purchase a merchandise inventory on account, the journal entry to record the merchandise inventory is -
July 5 Merchandise Inventory Debit $2,900
Accounts payable Credit $2,900
After returning the merchandise of $320, the due amount = $(2,900 - 320) = $2,580
As the supplier sets the term as 1/10, n/30, it means if the buyer pays within 1 day, the purchaser will receive a 1% discount, but has to pay the amount within 30 days.
As the company pays the amount within 4 days of purchase (July 5 to July 8), the company will get the discount after the sales return.
Therefore, the company will pay cash = $2,580 - ($2,580 × 1%)
= $2,580 - 26
= $2,554
Therefore, option c is the correct answer.
