A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:

Question

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The company purchased $1,800 of merchandise on July 5 with terms of 2/10, net 30. This means they can take a 2% discount if they pay within 10 days, otherwise, they have 30 days to pay the full amount.

On July 7, the company returned $200 worth of merchandise, bringing the total amount owed down to $1,600.

Since the company paid the full amount due on July 8, they did not take advantage of the discount, but they did pay within the 10-day period. Therefore, the amount they paid is $1,600 minus 2% of $1,600, which is $32.

$1,600 - $32 = $1,568

Therefore, the amount of cash paid on July 8 is $1,568, choice C.

A Company Purchased $1,800 of Merchandise on July 5 with Terms