Juniper Company uses a perpetual inventory system.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

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The correct answer is A.The amount of the cash paid on August 16 equals $8,167.50.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30. This means that the company can take a 1% discount if it pays the invoice within 10 days. The net amount of the invoice is $9,750 - (1% x $9,750) = $9,652.50. The company returned $1,500 worth of merchandise on August 11. This means that the net amount of the invoice is now $9,652.50 - $1,500 = $8,152.50. The company paid the full amount due on August 16. This means that the company paid $8,152.50.

Juniper Company Uses a Perpetual Inventory System