On June 15, Kersee Company sold merchandise on account to Eng Co. for $1,000, terms 2/10, n/30. On June 20, Eng Co. returns merchandise worth $300 to Kersee Company. On June 24, payment is received from Eng Co. for the balance due. What is the amount of cash received on June 24?

The amount received on June 24 is $686

Explanation:

given data

sold account = $1,000

terms = 2/10, n/30

returns merchandise = $300

to find out

amount of cash received on June 24

solution

we know here that payment is made within the discount period

that is discount period = 10 days

so amount received will be here

amount received = sold account - returns

amount received = $1000 - $300

amount received = $700

and discount is here

discount = 2% of amount received

discount = 2% * $700

discount = $14

so

amount of cash received is = amount received - discount

amount of cash received is = $700 - $14

amount of cash received is $686