Question

Ayayai Corp. sells merchandise on account for $7000 to Nash's Trading Post, LLC with credit terms of 2/8, n/30. Nash's Trading Post, LLC returns $1600 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

The amount of the check is $5,292

Step-by-step explanation:

The computation of the amount of the check is shown below:

= (Sales amount - return amount - Discount rate of adjusted sales)

= ($7,000 - $1,600 - 0.02 × $5,400

= $5,400 - $108

= $5,292

The adjusted sales equals to

= Sales amount - return amount

= $7,000 - $1,600

= $5,400

We assume that the Nash's trading company paid the amount within 8 days so that it can avails 2% discount