This question has two parts.

Part 1

• The seller records a credit sale for $1,000.
• Shortly after the sale, the buyer returns $300 and the seller credits the receivable by this amount.
• The seller also grants a further allowance to the buyer for $100.
• Finally, the buyer pays within the discount period to take advantage of a 2% discount.

What is the net amount of cash received by the seller?

Part 2

What is the amount the buyer will show as inventory on its balance sheet after all returns, discounts, and allowances?