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29 August, 05:46

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:

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  1. 29 August, 08:51
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    Amount of Cash paid is $2,415.3

    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
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