Tony's Market recorded the following events involving a recent purchase of inventory: Received goods for $40,000, 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 $38,416.
B) increased by $39,400.
C) increased by $38,612.
D) increased by $38,616.

Question

Quizplus · Accepted Answer

The company paid the invoice within the discount period, so it gets a 2% discount. The net amount of the invoice is $40,000 - $800 = $39,200. The discount is $39,200 x 2% = $784. The company also paid $200 for freight. So, the total cost of the inventory is $39,200 + $784 + $200 = $38,616.

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