Question

Novak Corp. sells merchandise on account for $3400 to Borth Company with credit terms of 2/15, n/30. Borth Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check

Answer 1

The amount of check is $3,038

Step-by-step explanation:

Credit terms of 2/15, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 15 days after sale with net credit period of 30 days.

According to given data

Sales = $3,400

Returns = $300

Amount due = $3,400 - $300 = $3,100

As the payment is made within discount period, so discount will be availed

Discount = $3,100 x 2% = $62

Amount of Check = $3,100 - $62 = $3,038