On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Co

Question

On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March 20, and takes the appropriate discount. The amount that Klein receives from Babson on March 20 is:

Explanation / Answer

12-Mar sales 7,800 15-Mar less:Sales return and allowance 600 20-Mar less :Sales discount (7800-600)*2% 144 amount received by klien company 7,056 answer

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