Answer:
Cash received on account =$ 6381.63
Explanation:
The payment terms 3/10, n/30 implies that if Guzman Housewares pays within the next 10 days of purchase, it will receive a discount of 3% of the net invoice amount and that the latest date for the settlement of bill is within the next 30 days of purchase.
The latest payment date to qualify for discount is May 27th i.e ( May 12 + 10) but the payment was made by May 20th , so this qualifies Guzman Housewares for the discount.
The net amount of cash received by Blue Company is computed as follows:
Net sales = Gross sales - Returns inwards ( Sales returns)
= 6,897 - 318 =$6,579
Cash received on account = Net sales - discount
= =$6,579 - (3%×6,579) = $6,381.63
Cash received on account =$ 6381.63
