On June 1, Merchandise Subject to Terms 2/10, N/30 Was

question 97

Essay

On June 1, merchandise subject to terms 2/10, n/30 was sold on account to a customer for $26,500. On June 3, the customer returns $5,800 of that merchandise.a)What is the amount of cash collected by the seller if the payment is made by the customer on June 8?b)What is the amount of cash collected by the seller if payment is made by the customer on June 21?

---

Definitions:

Cash Expenses

Outlays of cash during a given period for direct charges such as wages, rent, and utilities.

Net Present Value (NPV)

The gap between the current value of cash entering and the current value of cash exiting over a timeframe, employed in investment planning to evaluate the profitability of projects.

Capital Cost Allowance (CCA)

Depreciation for tax purposes, not necessarily the same as depreciation under International Financial Reporting Standards; depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.