Details of a purchase invoice and related credit memorandum are summarized as follows:

Invoice:

Cost of merchandise listed on purchase invoice

$7,500

Transportation charge added to invoice

Terms, FOB shipping point, 2/10, n/30

200

Credit memo: Cost of merchandise returned

$2,500

Assume that the return was received prior to payment and that the invoice is paid within the discount period.Determine the following: SHOW YOUR WORK please.

(a)

Amount of the cash discount allowed.

(b)

Amount to be paid by the purchaser if the discount is taken.

(c)

Amount to be paid by the purchaser if the discount is NOT taken.