Solution:- The correct answer is $ 1,901.
Explanation:- The term 3/10,n/30 means buyer are eligible to receive a discount of 3% if payment made within 10 days else total amount due in 30 days.
In the given case , payment is made within 10 days So, buyer will receive a discount of 3%.Goods was purchased on July,5 and payment is made on July,8 .So,Buyer is eligible to receive discount of 3%.
Particulars | Amount ($) |
Merchandise purchased (A) | $2,200 |
LESS-Merchandised Returned (B) | ($240) |
NET PURCHASED (A-B) | $ 1,960 |
LESS-3% Discount (1960*3%)=58.8 round off (59) (C) | ($59) |
AMOUNT TO BE PAID (A-B-C) | $1,901 |
Conclusion:-The amount of cash paid on July,8 is $1,901.
TB MC Qu. 04-107 A company purchased... A company purchased $2,200 of merchandise on July 5...
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A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, The correct journal entry to record the purchase on July 5 is:
TB MC Qu. 07-04 Gideon Company
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