On June 15,Oakley Inc.sells inventory on account to Sunglass Hut (SH)for $1,000,terms 2/10,n/30.On June 20,SH returns to Oakley inventory that SH had purchased for $300.On June 24,SH completely fulfills its obligation to Oakley by making a cash payment.What is the amount of cash paid by SH to Oakley?
A)$680
B)$686
C)$700
D)$1,000

Question

Quizplus · Accepted Answer

Sales discount = (Sale − Sales return)× Discount %
= ($1,000 − $300)× 2% = $14
Cash paid by customer = Sales revenue − Sales return − Sales discount
= $1,000 − $300 − $14 = $686