Question

Crane Company sells merchandise on account for $6000 to Blossom Company with credit terms of 1/10, n/30. Block Company returns $1400 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 $4,554

Step-by-step explanation:

Term 1/10, n/30 means there is a discount of 1% is available on payment of due amount within discount period of 10 days after sale and net credit period of 30 days.

According to given data

Sales = $6,000

Returns = $1,400

Amount due = $6000 - $1,400 = $4,600

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

Discount = $4,600 x 1% = $46

Amount of Check = $4,600 - $46 = $4,554