Question

Hale Company sells merchandise on account for $1,000 to Long Company with credit terms of 2/10, n/30. Long Company returns $200 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?a. $784b. $780c. $980d. $800

Answer 1

Amount of Check = $784

so correct option is a. $784

Step-by-step explanation:

given data

Merchandise on account = $1,000

Long Company returns = $200

credit terms = 2/10

n/30

to find out

What is the amount of the check

solution

we know here that Total Merchandise will be

Total Merchandise = Merchandise on account - returns ....................1

Total Merchandise = $1000 - $200

Total Merchandise = $800

and

discount will be here

Discount = 0.02 × 800

returns = $16

so

Amount of Check will be as

Amount of Check = Total Merchandise - Discount ...................2

put here value

Amount of Check = Total Merchandise - Discount

Amount of Check = $800 - $16

Amount of Check = $784

so correct option is a. $784