Waterway Company on July 15 sells merchandise on account to Carla Vista Co. for $4600, terms 3/10, n/30. On July 20 Carla Vista Co. returns merchandise worth $1600 to Waterway Company. On July 24 payment is received from Carla Vista Co. for the balance due. What is the amount of cash received

Question

Business

Dario Roth

6 October, 15:37

Waterway Company on July 15 sells merchandise on account to Carla Vista Co. for $4600, terms 3/10, n/30. On July 20 Carla Vista Co. returns merchandise worth $1600 to Waterway Company. On July 24 payment is received from Carla Vista Co. for the balance due. What is the amount of cash received

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Kendal Russell · Answer 1

The amount of cash received is $2,910

Explanation:

Terms of 3/10, n/30 means there is a discount of 3% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.

As per given data

Sale = $4,600

Sales return = $1,600

Receivable = $4,600 - $1,600 = $3,000

As the payment is made within discount period, so discount will be availed on the amount due

Discount = $3,000 x 3% = $90

Payment by Customer = $3,000 - $90 = $2,910