Question

A company purchased $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:

$7,968.


$8,342.


$7,925.


$8,170.


$8,600.

Answer 1

The cash paid on June 24 equals $ 8,754.25

Step-by-step explanation:

Let's recall that term 3/10, indicates the number of days (from the invoice date) within which the buyer should pay the invoice in order to receive the 3 % discount.

n/45 means that if the buyer does not pay the (full) invoice amount within the 10 days to qualify for the discount, then the net amount is due within 45 days after the sales invoice date.

Now, let's calculate the cash paid on June 24, this way:

June 15 - Purchase of $ 9,500

June 20 - Return of $ 475, Balance of $ 9,025

June 24 - Payment of balance less 3% discount because the company is paying before 10 days from the invoice date

9,025 * 0.97 = 8,754.25

Answer 2

The amount paid would be $ 8754.75 or $8755

Step-by-step explanation:

The terms of 3/10, n/45 tell us the 3 % discount will be allowed within the first ten days.

The company bought $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. So the amount of merchandise inventory left would be

$9,500-$475= $ 9025

On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to.

The discount allowed on $ 9025 would be

3 % of $ 9025=( 3/100)*9025= $ 270.75

Deducting this discount from the amount of $ 9025

The amount paid would be $ 9025 -$ 270.75= $ 8754.75 or $8755