Question

Syfy Company on July 15 sells merchandise on account to Eureka Co. for $3,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $1,200 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received?

Answer 1

The amount of cash received by Syfy Company is $1,764, after Eureka Co. returned some merchandise and took advantage of the discount for paying within the specified period.

Step-by-step explanation:

The student's question asks how to calculate the amount of cash received by Syfy Company when Eureka Co. makes a payment after returning some merchandise. Initially, Eureka Co. purchased merchandise on July 15 for $3,000 with terms 2/10, n/30, which means they could take a 2% discount if they pay within 10 days. On July 20, they return merchandise worth $1,200, reducing the amount they owe to $1,800. Since payment is made on July 24, within the discount period, Eureka Co. can take a 2% discount on $1,800, which is $36 ($1,800 x 0.02). Therefore, the amount of cash received is $1,800 - $36 = $1,764.