On June 15, the Greater Gravel Company purchased $700 of merchandise on account from the Digga Ditch Company, terms 4/10, n/30. The goods were shipped F.O.B. shipping point. The freight charge of $40 was paid by Digga Ditch Company and added to the invoice. The amount to record in the Inventory account is

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The amount to record in the Inventory account is the cost of the merchandise, which is $700, plus any freight-in costs. In this case, the freight charge of $40 was paid by the supplier and added to the invoice, so it is considered a part of the cost of the merchandise. Therefore, the total cost to be recorded in the Inventory account is $700 + $40 = $740.

On June 15, the Greater Gravel Company Purchased $700 of Merchandise