On June 15,Oakley Inc.sells merchandise on account to Sunglass Hut (SH)for $1,000,terms 2/10,n/30.On June 20,SH returns to Oakley merchandise 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?

Question

Quizplus · Accepted Answer

The amount that SH owes Oakley after deducting the return and the discount is:
$1,000 (original amount) - $300 (return) = $700 (net amount)
$700 x 0.98 (2% discount) = $686
Therefore, SH pays Oakley $686 in cash.