Question

TB MC Qu. 04-107 A company purchased... A company purchased $2,200 of merchandise on July 5 with terms 3/10,n/30. On July 7, it returned $240 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

Answer 1

Solution:- The correct answer is $ 1,901.

Explanation:- The term 3/10,n/30 means buyer are eligible to receive a discount of 3% if payment made within 10 days else total amount due in 30 days.

In the given case , payment is made within 10 days So, buyer will receive a discount of 3%.Goods was purchased on July,5 and payment is made on July,8 .So,Buyer is eligible to receive discount of 3%.

Particulars	Amount ($)
Merchandise purchased (A)	$2,200
LESS-Merchandised Returned (B)	($240)
NET PURCHASED (A-B)	$ 1,960
LESS-3% Discount (1960*3%)=58.8 round off (59) (C)	($59)
AMOUNT TO BE PAID (A-B-C)	$1,901

Conclusion:-The amount of cash paid on July,8 is $1,901.