Syfy Company on July 15 sells merchandise on account to Eureka Co. for $5,000, terms 2/10, n/30. On July 20 Eureka Co. returns merchandise worth $2,000 to Syfy Company. On July 24 payment is received from Eureka Co. for the balance due. What is the amount of cash received

The amount of cash received is $2940

Explanation:

The cash received by Syfy on July 24 will be for the amount due after accounting for sales return by Eureka and after deducting the sales discount / discount allowed.

The balance in accounts receivable account of Syfy after sales return by Eureka on July 20 will be,  5000 - 2000 = $3000

The payments terms allow a 2% discount if payment is made within 10 days of purchases. Eureka paid within the discount period thus it availed a discount of,

3000 * 0.02  =  $60

The amount of cash received by Syfy is = 3000 - 60  =   $2940

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.