Clarksburg Stores recorded the following events involving a recent purchase of merchandise:
•Received goods for $80,000, terms 2/10, n/30.
•Returned $1,600 of the shipment for credit.
•Paid $400 freight on the shipment.
•Paid the invoice within the discount period.
As a combined result of these events, the company's inventory:
A) Increased by $76,832
B) Increased by $77,200
C) Increased by $77,224
D) Increased by $77,232

Question

Quizplus · Accepted Answer

The company's inventory increased by $77,232, calculated as follows: Initial purchase of $80,000 minus returns of $1,600 gives a subtotal of $78,400. The 2% discount on this amount ($1,568) reduces it to $76,832, and adding the freight costs of $400 results in a final total of $77,232.

Clarksburg Stores Recorded the Following Events Involving a Recent Purchase