Leeann Company sold merchandise on credit to Janelle Company for $1,000 on July 1, with terms of 2/10, net /30. On July 6, Janelle returned $200 worth of merchandise claiming the materials was defective. On July 8, Leeann received a payment from Janelle and credited Accounts Receivable for $450. On July 24, Janelle Company paid the remaining balance on their account. What was the total cash received from Janelle during July?

Question

Leeann Company sold merchandise on credit to Janelle Company for $1,000 on July 1, with terms of 2/10, net /30. On July 6, Janelle returned $200 worth of merchandise claiming the materials was defective. On July 8, Leeann received a payment from Janelle and credited Accounts Receivable for $450. On July 24, Janelle Company paid the remaining balance on their account. What was the total cash received from Janelle during July?

Can anyone please explain how to calculate this prooblem.

Answer 1

1000 - 200 = 800

Answer 2

16. You receive an invoice for $565.00 with terms 3/10, net 30. If you pay it immediately, how much will you pay?

Answer 3

To calculate the total cash received from Janelle during July, we need to break down the timeline and analyze each transaction:

1. On July 1, Leeann Company sold merchandise on credit to Janelle Company for $1,000. The terms are stated as 2/10, net/30. This means that Janelle can receive a 2% discount if payment is made within 10 days. Otherwise, the full payment is due within 30 days.

2. On July 6, Janelle returns $200 worth of defective merchandise. This means that Janelle's outstanding balance is reduced by $200.

3. On July 8, Leeann received a payment from Janelle for $450. This partial payment is credited to the Accounts Receivable account, reducing the outstanding balance further.

4. Finally, on July 24, Janelle Company pays the remaining balance on their account.

To calculate the total cash received:

1. First, calculate the outstanding balance after the return of defective merchandise:
Outstanding balance = $1,000 - $200
Outstanding balance = $800

2. Next, deduct the partial payment made on July 8 from the outstanding balance:
Outstanding balance = $800 - $450
Outstanding balance = $350

3. Finally, add the remaining balance paid on July 24 to the previously calculated outstanding balance:
Total cash received from Janelle = $350 + Remaining balance

The remaining balance is not provided in the problem statement, so we cannot determine the exact total cash received from Janelle during July without that information.