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12 August, 12:42

On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

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  1. 12 August, 12:53
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    The amount of cash received is $2,328

    Explanation:

    In the given question, it is mentioned that the nifty company sells on January 15 for $3,000 with term 3/10, n/30, means if the payment is given within 10 days then the company will give a 3% discount.

    And, on January 20, Martinez returns $600 merchandise

    And on January 24., the payment is received

    So, first we have to compute the net sales amount which is calculated below:

    = Sales - sales return

    = $3,000 - $600

    = $2,400

    After that apply the 3% discount on the net sales, since the payment is paid within 10 days (From January 15 to January 24)

    So, the discount value would be

    = $2,400 * 3%

    = $72

    So, the amount of cash received would be

    = Net sales - discount

    = $2,400 - $72

    = $2,328

    Hence, the amount of cash received is $2,328
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