On February 12,Horseshoe Bend Company purchases $25,000 of merchandise from a vendor with credit terms of 2/10,n/30.On February 15,Horseshoe Bend Company returns $5,000 of the goods because they are defective.If Horseshoe Bend pays the vendor the full amount due on February 20,the amount of the payment is ________.

Question

Quizplus · Accepted Answer

The net amount due for Horseshoe Bend Company is calculated as follows: 
Original amount due = $25,000 
Return = $5,000 
Amount due = $20,000 
If the company pays within the discount period, they can take 2% off of the amount due: 
Discount = 2% x $20,000 = $400 
Amount due after discount = $20,000 - $400 = $19,600. 
Therefore, the correct answer is C.

On February 12,Horseshoe Bend Company Purchases $25,000 of Merchandise from a Vendor