question archive Aber Company sells merchandise on account for $1,800 to Borth Company with credit terms of 2/10, n/30
Aber Company sells merchandise on account for $1,800 to Borth Company with credit terms of 2/10, n/30
Subject:BusinessPrice:2.88 Bought3
Aber Company sells merchandise on account for $1,800 to Borth Company with credit terms of 2/10, n/30. Borth Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
a. $1,464
b. $1,476
c. $1,470
d. $1,350
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Answer: c. $1,470
Explanation:
The amount Borth Company owes to Aber Company after merchandise returns = $1,800 - $300 = $1,500.
Since Borth Company pays with the discount period, it will be entitled to a 2% discount as stipulated in the credit terms,
Discount amount = $1,500 x 2% = $30
Hence, amount of the check = $1,500 - $30 = $ 1,470
