Phillips Corp.purchased raw materials with a catalog price of $60, 000.Credit terms of 3/15, n/60 apply.If Phillips uses the net price method, the purchase should be recorded at
A)$61, 800
B)$60, 000
C)$58, 200
D)$51, 000

Question

Quizplus · Accepted Answer

The net price method takes the catalog price and subtracts the discount. In this case, the discount is 3% of the catalog price, or $1,800. Therefore, the purchase should be recorded at $58,200 ($60,000 - $1,800).