Use the following information for questions Tuck Corp.records purchases at net amounts.On May 5, Tuck purchased merchandise on account costing $8,000 (gross), terms 2/10, n/30.Tuck returned $700 of the May 5 purchase and received credit on account.At May 31 the balance had not been paid.
-By how much should the account payable be adjusted on May 31?
A)$0
B)$146
C)$160
D)$540

Question

Quizplus · Accepted Answer

The purchase was recorded at net amount, which means Tuck initially recorded the purchase at $8,000 - 2% = $7,840. After returning $700, the net purchase becomes $7,140. Since the payment was not made within the discount period, the account payable should be adjusted by the discount amount on the returned goods, which is 2% of $700 = $14. Therefore, the adjustment needed is $160 - $14 = $146.

Use the Following Information for Questions Tuck Corp