n30 On 9 Sundberg Inc bought 9000 of merchandise on June 5 w

n/30. On 9. Sundberg Inc. bought $9,000 of merchandise on June 5 with terms 3/10, June 7, it returned $1,000 worth of merchandise. On June 14, it paid the entire amount due. How much did they pay? A. $1,000. B. $7,760. c, $7,758. D. $8,000. E. $9,000. 10. A company that uses the gross method of recording purchases and a perpetual ory system made a purchase of $1,200 with terms of3/10, n/60. The entry to record the purchase would be: A. Debit Merchandise Inventory $392; credit Accounts Payable $392. B. Debit Accounts Payable $1,200; credit Discounts Lost $36; credit Cash $1,164. C. Debit Merchandise Inventory $1,164; credit Cash for $1,164. D. Debit Merchandise Inventory $1,164; debit Discounts Lost $36; credit Accounts Payable $1,200 E. Debit Merchandise Inventory $1,200; credit Accounts Payable $1,200.

Solution

Credit term is 3/10, n/30

If the balance is paid before 10 days, company will get 3% discount, otherwise it has to pay entire amount before 30 days.

Bill amount is 9000, however 1000 worth of goods has been returned, so bill amount is 8000.

The entire amount is paid on July 14, however bill date was June 5, so there will be 3% discount on the total bill amount.

Discount = 8000* 0.03 = 240

Total amount paid after discount = 8000 – 240 = 7760

Correct answer is B.