A company purchased $10,100 of merchandise on June 15 with terms of 2/10, n/45,

Q: A company purchased $10,100 of merchandise on June 15 with terms of 2/10, n/45,

DATE PARTICULARS Amount 15-Jun Cost of Merchandise $10,100 Prepaid Freight charges $550 20-Jun Purchase returns $880 Discount Eligible @2% $184 ($10100-880)*0.02 24-Jun Balance paid $9,586 Note: DATE PARTICULARS Amount 15-Jun Cost of Merchandise $10,100 Prepaid Freight charges $550 20-Jun Purchase returns $880 Discount Eligible @2% $184 ($10100-880)*0.02 24-Jun Balance paid $9,586

ID: 2415643 • Letter: A

Question

A company purchased $10,100 of merchandise on June 15 with terms of 2/10, n/45, and FOB shipping point. The freight charge was $550 and was prepaid by the seller. On June 20, it returned $880 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:

$10,650.

$10,430.

$9,586.

$10,330.

$9,224.

Explanation / Answer

DATE

PARTICULARS

Amount

15-Jun

Cost of Merchandise

$10,100

Prepaid Freight charges

$550

20-Jun

Purchase returns

$880

Discount Eligible @2%

$184

($10100-880)*0.02

24-Jun

Balance paid

$9,586

Note: