Question

A company purchased $2,800 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $310 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

Answer 1

Amount of Cash paid is $2,415.3

Step-by-step explanation:

Credit terms of 3/10, n/30 means there is a discount of 3% is available on payment of due amount within discount period of 10 days after purchase with net credit period of 30 days.

Purchase = $2,800

Amount Due = $2,800 - $310 = $2,490

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

Discount = $2,490 x 3% = $74.7

Payment = $2,490 - $74.7 = $2,415.3

Payment = $7,500 - $150 = $7,350