Question

Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. What is the amount of payment received by Allied from Macy?

Answer 1

Allied receives payment from Macy for the May 5 purchase, net of returns, allowances, and cash discounts. To calculate the exact payment amount, subtract returns and allowances from the original purchase amount and apply any cash discounts.

Step-by-step explanation:

The amount of payment received by Allied from Macy will be the original amount of the purchase made on May 5, less any returns, allowances, and cash discounts that Macy is entitled to. To determine the exact payment amount, one must know:

Once this information is gathered, the calculation is straightforward. Subtract the total of returns and allowances from the original purchase amount, and then apply the cash discount if applicable. The final figure represents the net payments received by Allied.