Final answer:
The question concerns a business transaction where Sunland Company sells merchandise on account to Blossom Company with specific credit terms, and Blossom returns part of the merchandise due to damage. This involves understanding sales, accounts receivable, returns, and allowances in financial accounting.
Step-by-step explanation:
The question relates to a business transaction involving Sunland Company and Blossom Company, where merchandise is sold on account with specific credit terms, and a subsequent return of damaged goods occurs. When Sunland sells merchandise to Blossom on credit terms of 2/10, n/30, it means Blossom can take a 2% discount if they pay within 10 days; otherwise, the net amount is due in 30 days. However, after Blossom returns $1200 of damaged merchandise, the amount subject to the credit terms will be adjusted accordingly.
This involves concepts such as sales, returns, allowances, and credit terms, which are fundamental in understanding how businesses manage revenue and accounts receivable. Additionally, the ability to adjust transactions after damage goods are returned is an important aspect of financial accounting.