Bosworth Company purchased $12,000 worth of merchandise, FOB shipping point. Transportation costs were an additional $1,050. The company later returned $2,250 worth of merchandise and paid the invoice within the 2% cash discount period.
The total amount paid for this merchandise is:

Question

Quizplus · Accepted Answer

The net purchase after return is $12,000 - $2,250 = $9,750. The 2% discount on $9,750 is $195, so the discounted amount is $9,750 - $195 = $9,555. Adding transportation costs of $1,050, the total amount paid is $9,555 + $1,050 = $10,605.

Bosworth Company Purchased $12,000 Worth of Merchandise, FOB Shipping Point