Caps On Company manufactures sporting goods and clothing. Caps On sold merchandise to Pro Sports Company on June 5, 2014 for $1,500, terms 2/10, n/30. On June 9, 2014 Pro Sports returns merchandise worth $100 to Caps On. On June 14, 2014 Caps On receives payment in full from Pro Sports. Which of the following is true regarding the transaction on June 14, 2014?

Question

Quizplus · Accepted Answer

The original amount owed by Pro Sports was $1,500. However, they returned merchandise worth $100, so the net amount owed was $1,400. The terms were 2/10, n/30, so if Pro Sports paid within 10 days, they would receive a 2% discount. Therefore, the amount paid by Pro Sports on June 14, 2014 would be $1,400 - ($1,400 x 0.02) = $1,372.

Caps on Company Manufactures Sporting Goods and Clothing