Devonshire,Inc.sold merchandise inventory on account at a price of $16,000 with payment terms of 1/10,n/30.The merchandise cost Devonshire $11,000.If the customer paid for the merchandise 5 days after receiving the invoice,how much cash was collected by Devonshire?
A)$11,000
B)$15,840
C)$10,890
D)$16,000

Question

Quizplus · Accepted Answer

The customer paid within the 10-day discount period and,as such,will take advantage of the 1% discount.The amount of cash paid by the customer and received by Devonshire is $15,840 [$16,000 − ($16,000 × 0.01)].