Costner's Market recorded the following events involving a recent purchase of merchandise: Received goods for $40000 terms 2/10 n/30.
Returned $800 of the shipment for credit.
Paid $200 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events the company's inventory
A) increased by $38416.
B) increased by $38612.
C) increased by $38616.
D) increased by $39400.

Question

Quizplus · Accepted Answer

The net amount after the discount can be calculated as: 
$40000 - ($40000 * 2%) = $39200
Then adding the freight of $200, the total cost is $39400
After returning $800 of merchandise, the final cost of the inventory is $38600
Therefore, the inventory increased by $38616 ($38600 + $16 credit for returned merchandise).

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