Question

A company purchased $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:

Answer 1

The cash paid by a company on June 24 for merchandise after returning part of it and taking an early payment discount is $8,754.25.

Step-by-step explanation:

The question involves calculating the cash paid by a company for merchandise it purchased. The company bought merchandise for $9,500 on June 15 with the terms 3/10, n/45. This means they could take a 3% discount if they paid within 10 days (early payment discount) and the net amount was due in 45 days. Since the company returned merchandise worth $475 on June 20, the total amount would now be $9,500 - $475 = $9,025. When the company pays the balance on June 24, it is within the 10-day window to take the 3% discount. Therefore, the calculation for the cash paid would be 97% of $9,025, which equals $8,754.25. Thus, the cash paid on June 24 is $8,754.25.

Answer 2

The cash paid on June 24 is $8,754.25

Step-by-step explanation:

The computation of the cash paid is shown below:

= (Merchandise purchase - returned goods) × ( 1 - discount rate)

= ($9,500 - $475) × ( 1 - 0.03%)

= $9,025 × 0.97

= $8,754.25

Since the company paid the amount within the discount period, so it can avail the discount benefit.

We deduct the discount rate from 1 as the percentage value is 100 so that accurate value can come.