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6 March, 15:06

On June 15, Kersee Company sold merchandise on account to Eng Co. for $1,000, terms 2/10, n/30. On June 20, Eng Co. returns merchandise worth $300 to Kersee Company. On June 24, payment is received from Eng Co. for the balance due. What is the amount of cash received on June 24?

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  1. 6 March, 15:12
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    The amount received on June 24 is $686

    Explanation:

    given data

    sold account = $1,000

    terms = 2/10, n/30

    returns merchandise = $300

    to find out

    amount of cash received on June 24

    solution

    we know here that payment is made within the discount period

    that is discount period = 10 days

    so amount received will be here

    amount received = sold account - returns

    amount received = $1000 - $300

    amount received = $700

    and discount is here

    discount = 2% of amount received

    discount = 2% * $700

    discount = $14

    so

    amount of cash received is = amount received - discount

    amount of cash received is = $700 - $14

    amount of cash received is $686
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