Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $60,000, terms 2/10, n/30.
Returned $1,200 of the shipment for credit.
Paid $300 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's inventory increased by
A) $57,624.
B) $57,918.
C) $57,924.
D) $59,100.

Question

Quizplus · Accepted Answer

The cost of goods received can be calculated as follows:

$60,000 - ($60,000 x 0.02) = $58,800

The returned goods and freight costs do not affect the cost of goods received, as they are separate transactions.

Since the invoice was paid within the discount period, the company is entitled to a discount of $58,800 x 0.02 = $1,176.

Therefore, the cost of the goods after the discount is $58,800 - $1,176 = $57,624.

Since the company's inventory increased by the full cost of the goods received, the answer is $57,624.

Jake's Market Recorded the Following Events Involving a Recent Purchase