A company that uses a perpetual inventory system 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 28, it paid the amount due. The amount of the discount lost by failing to pay within the discount period equals:
A)$32.
B)$36.
C)$4.
D)$40.
E)$200.

Question

Quizplus · Accepted Answer

The discount period is 10 days, and the company did not pay within this period. The discount would have been 2% of the net purchase ($1,800 - $200 = $1,600), which is $32.

A Company That Uses a Perpetual Inventory System Purchased $1,800