A cash customer purchased $3,000 of merchandise on which sales tax of 7% was charged. The customer subsequently returned $500 of the merchandise for a refund. The amount of the cash refund is

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The total amount of the merchandise purchased was $3,000 with a 7% sales tax, which equals $210 in sales tax ($3,000 x 0.07 = $210). Thus, the total amount charged to the customer was $3,210 ($3,000 + $210).

When the customer returns $500 of the merchandise, the amount charged to the customer needs to be reduced accordingly. To calculate the new amount, we need to subtract the tax on the returned merchandise ($500 x 0.07 = $35) from the $500 refund. This gives us a cash refund of $465 ($500 - $35).

Therefore, the correct answer is C) $535.00.

A Cash Customer Purchased $3,000 of Merchandise on Which Sales