On January 15, Walton Company sold merchandise on account for $3,000 with terms 3/10, n/30. On January 20, the customer returns merchandise with an invoice price of $600. On January 25, the customer pays the balance due. What is the amount of cash received by Walton Company?

Question

Business

Gael

23 May, 07:55

On January 15, Walton Company sold merchandise on account for $3,000 with terms 3/10, n/30. On January 20, the customer returns merchandise with an invoice price of $600. On January 25, the customer pays the balance due. What is the amount of cash received by Walton Company?

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Answers (1)

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Konnor Frank · Answer 1

The amount received in cash is $2,328

Explanation:

The amount which is received in cash is computed as:

On January 20, the amount of $600 goods returns from customer, so the remaining balance is

= $3,000 - $600

= $2,400

On the remaining balance, the discount which is evaluated as the payment is received within the discount period which is January 25. So,

= $2,400 x (100% - 3%)

= $ 2,400 x 97%

= $ 2,328