Juniper Company Uses a Perpetual Inventory System and the Gross

question 8

Multiple Choice

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The amount of the cash paid on August 16 equals:

• A)$8,167.50.
• B)$9,652.50.
• C)$9,750.00.
• D)$8,250.00.
• E)$8,152.50.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Uncollectible Receivable

A debt owed to a company that is considered unlikely to be paid by the debtor, classified as a loss.

Working Capital

Current assets minus current liabilities, representing the short-term liquidity and operational efficiency of a business.