Mindful Corporation sells merchandise on account for $5,000 to Absent Corporation with credit terms of 2/10, n/30.Absent returns $750 of merchandise that was damaged, along with a cheque to settle the account within the discount period.What is the amount of the cheque?
A)$4,900
B)$4,250
C)$5,000
D)$4,165

Question

Quizplus · Accepted Answer

The original sale was for $5,000, but Absent Corporation returned $750 worth of merchandise, reducing the amount they owe to $4,250 ($5,000 - $750). With the 2% discount for paying within the discount period, the discount amount is 2% of $4,250, which is $85 ($4,250 * 0.02). Therefore, the amount of the cheque would be $4,250 - $85 = $4,165.

Mindful Corporation Sells Merchandise on Account for $5,000 to Absent