Waterway Company on July 15 sells merchandise on account to Carla Vista Co. for $4600, terms 3/10, n/30. On July 20 Carla Vista Co. returns merchandise worth $1600 to Waterway Company. On July 24 payment is received from Carla Vista Co. for the balance due. What is the amount of cash received

The amount of cash received is $2,910

Explanation:

Terms of 3/10, n/30 means there is a discount of 3% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.

As per given data

Sale = $4,600

Sales return = $1,600

Receivable = $4,600 - $1,600 = $3,000

As the payment is made within discount period, so discount will be availed on the amount due

Discount = $3,000 x 3% = $90

Payment by Customer = $3,000 - $90 = $2,910