Question

A company purchased $11,100 of merchandise on June 15 with terms of 2/10, n/45, and FOB shipping point. The freight charge was $1,050. On June 20, it returned $1,680 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:A. $9,224.B. $11,630.C. $12,150.D. $11,730.E. $10,282.

Answer 1

E. $10,282

Explanation:

Since payment was made within 10 days, the company was entitled to a 2% discount on the $11,100 -1,680 = $9,420 value of the merchandise it kept. So, the payment amounted to ...

$9420 - 188.40 + 1050 = $10281.60 ≈ $10,282