Question

Description Dr Cr Question 1 A company purchased $1,800 of merchandise on November 5. On November 7, it returned $200 worth of merchandise. On November 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on November 8 equals A $200.00 B $1,564.00 C $1,568.00 D $1,600.00 E $1,800.00

Answer 1

Option C $ 1,568 is the Correct Answer .

Amount of Goods Purchased = $ 1,800

Amount of Goods Returned = $ 200

Balance to be paid for = 1,800 - 200

Balance to be paid for = $ 1,600

Payment after taking 2% Discount = 1,600 - 2% Of $ 1,600

Payment after taking 2% Discount = 1,600 - 32

Payment after taking 2% Discount = $ 1,568.

Merchandise A/C..Dr 1,800

To Accounts Payables. 1,800

For Recording Return

Accounts Payable A/C.Dr. 200

To Merchandise Returns. 200

For Payment

Accounts Payable A/C..Dr. 1,600

To Cash. 1,568

To Discount 32