Question

On February 3, a company provides services on account for $32,500, terms 2/10, n/30. On February 9, the company receives payment from the customer for those services on February 3. What is the amount of the payment received by the company?

Answer 1

The payment received by the company is $31,950.

Step-by-step explanation:

The payment received by the company is calculated by taking the total amount of the services provided on account and subtracting any applicable discounts.

In this case, the total amount of the services provided is $32,500. Since the terms are 2/10, n/30, this means that the company can apply a 2% discount if the payment is made within 10 days. However, if the payment is not made within 10 days, the full amount is due within 30 days.

Since the payment was received on February 9, which is within the 10-day discount period, the company can apply the 2% discount. Therefore, the payment received by the company is:

$32,500 - ($32,500 * 0.02) = $31,950