Sheridan Company sells merchandise on account for $1600 to Borth Company with credit terms of 2/12, n/30. Borth Company returns $300 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check

$1,274

Explanation:

Credit terms of 2/12, n/30 mean that the buyer is allowed a 2% discount if they pay in 12 days otherwise they would have to pay the full figure in 30 days.

Borth returned $300 so the net merchandise value they bought it;

= 1,600 - 300

= $1,300

Check was sent within discount period;

= 1,300 * ( 1 - 2%)

= $1,274

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