Question

Multiple Choice Question 71

Bramble Corp. on July 15 sells merchandise on account to Tayler Co. for $4000, terms 3/10, n/30. On July 20 Tayler Co. returns merchandise worth $1600 to Bramble Corp.. On July 24 payment is received from Tayler Co. for the balance due. What is the amount of cash received?

$2280

$4000

$2400

$2328

Answer 1

Answer (D) $2328

Terms 3/10 means if Tayler Co. makes the payment within 10 days then they will get the discount of 3% on the balance payable amount. In the given case the payment was made within 10 days which means a 3% discount is available now.

Amount of cash received will be

$4000 - $1600 = $2400 (Total merchandise - returns merchandise)

now 3% discount will be deducted from $2400 i.e $2400 * 3% = $72

Now the final cash received is = $2400 - $72 = $2328