Cleese Company sells merchandise on account for $5,000 to Langston Company with credit terms of 2/10, n/30. Langston Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?

Question

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The original sale was $5,000. After returning $1,000 of damaged merchandise, the balance is $4,000. With a 2% discount for paying within 10 days, the discount is $80 (2% of $4,000), so the check amount is $3,920.

Cleese Company Sells Merchandise on Account for $5,000 to Langston