Geran Company purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Geran Company pays within the discount period?

Question

Quizplus · Accepted Answer

2% of $12,000 is a discount of $240 ($12,000 x 0.02 = $240). The net cost of the goods is the invoice price minus the discount, which is $11,760 ($12,000 - $240).

Geran Company Purchased Merchandise Inventory with an Invoice Price of $12,000