Question

Bramble Corp. on July 15 sells merchandise on account to Sheridan Company for $4000, terms 3/10, n/30. On July 20 Sheridan Company returns merchandise worth $1600 to Bramble Corp.. On July 24 payment is received from Sheridan Company for the balance due. What is the amount of cash received?

A. $2280
B. $2328
C. $4000
D. $2400

Answer 1

Amount of cash flow will be $2328

So option (B) will be the correct answer

Step-by-step explanation:

We have given total merchandise = $4000

And return merchandise = $1600

Here
`(3)/(10)` means if Sheridan Company makes the payment within 10 days then he will get discount of 3 % as in the question he makes the payment within 10 days so he will will get 3 % discount

Now amount of cash received = total merchandise - return merchandise

= $4000 - $1600 = $2400

Now discount is 3 %

So after discount amount received
`=2400-2400* 0.03=2400-72=$2328`

So option (B) will be the correct answer