Carson Company on July 15 sells merchandise on account to Tayler Co. for $2,000, terms 2/10, n/30. On July 20 Tayler Co. returns merchandise worth $800 to Carson Company. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?
A) $1,200
B) $1,176
C) $1,160
D) $2,000

Question

Quizplus · Accepted Answer

The original sale was $2,000 with a $800 return, leaving a balance of $1,200. Tayler Co. pays within the discount period, so they receive a 2% discount on $1,200, which is $24. Therefore, the cash received is $1,200 - $24 = $1,176.

Carson Company on July 15 Sells Merchandise on Account to Tayler