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25 February, 04:12

Medlock Company sold inventory on credit for $3,000, terms 2/10, n/30. The cost of the merchandise to Medlock was $2,400. How much cash will Medlock receive if payment is received within the discount period?

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  1. 25 February, 05:30
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    Medlock will receive $2,940

    Explanation:

    Credit terms of 2/10, n/30 means there is a discount of 2% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.

    According to given data

    Sales = $3,000

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

    Discount = $3,000 x 2% = $60

    Now deduct the discount from due balance to calculate the amount received.

    Amount Received = $3,000 - $60 = $2,940
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