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?

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Definitions:

Variable Expenses

Costs that vary directly with the level of production or business activity.

Contribution Margin

The amount by which sales revenue exceeds variable costs. It is used to cover fixed costs and generate profit.

Contribution Margin

The difference between a company's sales revenue and variable costs, indicating the amount available to cover fixed costs and generate profit.

Fixed Expenses

Expenses that remain constant regardless of the amount of output or sales, including items like lease payments, wages, and insurance costs.