Kern Company sells merchandise on account for $8,000 to Block Company with credit terms of 2/10, n/30. Block Company returns $1,600 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
A) $6,272
B) $6,400
C) $7,840
D) $7,872

Question

Quizplus · Accepted Answer

The original sale was $8,000. After returning $1,600 of damaged merchandise, the balance is $6,400. With a 2% discount for early payment, the discount is $128 (2% of $6,400). Therefore, the amount of the check is $6,400 - $128 = $6,272.

Kern Company Sells Merchandise on Account for $8,000 to Block