A buyer owes $500 for merchandise plus $20 of freight on one invoice, terms 2/10 net 30, and pays within the discount period under the perpetual system. The discount applies only to the merchandise. How much cash is paid?

1. Discounts are taken only on merchandise cost, never on transportation. 2. Discount = $500 x 2% = $10. 3. Cash paid = ($500 - $10) + $20 freight = $490 + $20 = $510. 4. $520 takes no discount; $509.60 wrongly discounts the whole $520; $490 omits the freight. _Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §3.4 "Transportation Costs", p.103_