Missouri Company uses a perpetual inventory system.On October 1,Missouri Company sold inventory on account in the amount of $6,500 to Montebello Company,terms 1/10,n/30.The items cost Missouri $4,200.On October 4,Montebello returns some of the inventory.This inventory had a selling price of $500 and a cost of $200.On October 8,Montebello Company paid Missouri Company the amount due on that date. What is the amount of cash received by Missouri Company on October 8 for the receipt of payment from Montebello?
A)$6,500
B)$5,940
C)$6,435
D)$6,300

Question

Quizplus · Accepted Answer

The customer paid within the discount period,so the amount due is 99% of the net amount purchased of $6,000 ($6,500 − $500).The cash received is $6,000 × 0.99 = $5,940.

Missouri Company Uses a Perpetual Inventory System