Fowler Company on July 15 sells merchandise on account to Coffey Co.for $1,500, terms 2/10, n/30.On July 20 Coffey Co.returns merchandise worth $600 to Fowler Company.On July 24 payment is received from Coffey Co.for the balance due.What is the amount of cash received?

Question

Quizplus · Accepted Answer

The original sale was $1,500. After the return of $600, the balance is $900. Coffey Co. pays within the discount period, so they receive a 2% discount on $900, which is $18. Therefore, the cash received is $900 - $18 = $882.

Fowler Company on July 15 Sells Merchandise on Account to Coffey