Birk Company sells merchandise on account for $2,000 to Kiner Company with credit terms of 2/10, n/30. Kiner Company returns $400 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

Quizplus · Accepted Answer

The original sale was $2,000. After returning $400 of damaged merchandise, the balance is $1,600. Applying the 2% discount for early payment, the discount is $32 ($1,600 x 0.02). Therefore, the amount of the check is $1,568 ($1,600 - $32).

Birk Company Sells Merchandise on Account for $2,000 to Kiner