Question

merchandise subject to terms 2/10, n/30, fob shipping point, is sold on account to a customer for $15,200. what is the amount of sales discount allowable? a. $83 b. $155 c. $304 d. $144

Answer 1

The amount of sales discount allowable for merchandise sold for $15,200, subject to terms 2/10, n/30, is $304.

Step-by-step explanation:

Merchandise, subject to terms 2/10, n/30, FOB shipping point, sold on account for $15,200, offers a cash discount for early payment. To calculate the sales discount allowable, we apply the 2% discount rate to the total amount:

Sales Discount = Total Amount x Discount Rate

Sales Discount = $15,200 x 0.02

Sales Discount = $304

Hence, the buyer is eligible for a $304 discount if they pay within 10 days.