A company purchased $2,000 of merchandise on Nov. 2 with terms 2/10, n/30. On No

Question

A company purchased $2,000 of merchandise on Nov. 2 with terms 2/10, n/30. On Nov. 8, it returned $500 worth of merchandise. On Nov. 10, it paid the invoice. The amount paid on Nov. 10 equals : ?

A company purchased $5,000 worth of merchandise inventory. The company paid for transportation costs of $400. The company later returned damaged investory for $380 and paid the invoice with a 2% discount period. What is the total amount paid for this merchandise inventory?

A. $5,400

B. $5,320

C. $4,927

D. $5,292

Explanation / Answer

a) Amount paid on NOV 10th with terms 2/10 , n/30 = (Initial purchases-Returns)*0.98 = (2000-500)*0.98 = $1470

Above terms imply 2% discount for payments within 10 days and full payment due within 30 days.

b) C. $4,927

Total amount paid = (Initial purchases-Returns)*0.98 + Transportation costs = (5000-380)*0.98 + 400 = 4527.6 + 400 = $4927.6

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