A company purchased $10,000 of merchandise on June 15 with terms of 3/10,n/45.On June 20,it returned $800 of that merchandise.On June 24,it paid the balance owed for the merchandise taking any discount it was entitled to.The cash paid on June 24 equals:
A)$8,924.
B)$9,700.
C)$10,000.
D)$9,800.
E)$8,724.

Question

Quizplus · Accepted Answer

The discount period is 10 days from the invoice date, which is June 15. This means that the company has until June 25 to take the discount. The company paid the balance on June 24, which is within the discount period. Therefore, the company is entitled to the discount of 3%. The amount of the discount is $10,000 x 3% = $300. The amount of the cash paid is $10,000 - $300 = $9,700.

A Company Purchased $10,000 of Merchandise on June 15 with Terms