Merchandise is sold for $2,500 with terms 1/10, n/30.If $500 of the merchandise is returned prior to payment and the invoice is paid within the discount period, the amount of the sales discount is $20.

Question

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The sales discount is calculated on the net amount after returns. The net amount is $2,000 ($2,500 - $500), and the discount is 1% of $2,000, which is $20.

Merchandise Is Sold for $2,500 with Terms 1/10, N/30