Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise.
-On August 26, it paid the full mount due. The amount of the cash paid on August 26 equals:
A) $9,652.50.
B) $8,250.00.
C) $9,750.00.
D) $8,167.50.
E) $8,152.50.

Question

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. 
-On August 26, it paid the full mount due. The amount of the cash paid on August 26 equals:
A) $9,652.50.
B) $8,250.00.
C) $9,750.00.
D) $8,167.50.
E) $8,152.50.

Quizplus · Accepted Answer

The original purchase was $9,750. After returning $1,500 worth of merchandise, the amount due was $8,250. Since the payment was made after the discount period, no discount was applied, so the full amount of $8,250 was paid.

Juniper Company Uses a Perpetual Inventory System and the Gross