Question

Cruise industries purchased $10,800 of merchandise on February 1, 2007, subject to a discount trade of 10% and with credit terms of 3/15, n/60. It returned $2,500 (gross price before trade or cash discount) on February 4. The invoice was paid on February 13.

At what amount would the purchase on February 1 be recorded if the net method were used?

Is this right?
10,800 x 10% =1080
10,800 -1080 = 9720
9720 x 3% = 291.60
9720 - 291.60 = $9428.40 net.

Answer 1

Therefore, the purchase on February 1 would be recorded at $9428.40 if the net method were used.