Question

A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the invoice. The amount of the cash paid on July 8 equals: A) $200 B) $1,564. C) $1,568 D) $1,600 E) $1,800. Select one: O A. Choice A O B. Choice B O C. Choice C O D. Choice D O E. Choice E A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On August 5th, it paid the full amount due. The amount of the cash paid on August 5th equals: A) $200. B) $1,564. C) $1,568. D) $1,600. E) $1,800

Answer 1

1) Cash paid = Cost-Purchase return-purchase discount = (1800-200)*98% = 1568

So answer is c) Choice C

2) Cash paid = 1800-200 = 1600

So answer is d) $1600