Costner's Market recorded the following events involving a recent purchase of merchandise: 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

Question

Quizplus · Accepted Answer

The company's inventory increased by $38,616. This is calculated by starting with the initial purchase of $40,000, subtracting the returns of $800 to get $39,200, adding freight costs of $200 to get $39,400, and then applying the 2% discount on the net purchase ($39,200) which is $784 ($39,200 * 2% = $784), resulting in a final inventory increase of $39,400 - $784 = $38,616.

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