Question

A company purchased $8,500 worth of merchandise. Transportation costs were an additional $50. The company later returned $800 worth of merchandise and paid the invoice within the 3% cash discount period. The total amount paid for this merchandise is:

A. $7,517.50

B.$8,245.00

C.$7,519.00

D.$7,750.00

E.$8,295.00

Answer 1

C. $7,519.00

Step-by-step explanation:

The computation of the total amount paid is shown below

= Merchandise purchased amount + additional transportation costs - return of merchandised goods - discount

= $8,500 + $50 - $800 - $231

= $7,519

The discount = (Merchandise purchased amount - return of merchandised goods) × discount rate

= ($8,500 - $800) × 3%

= $231

For determining the discount we do not consider the transportation cost