An electronics retailer purchases $20,000 of computers for resale.The retailer spends $500 in transportation cost,$2,000 in labour and parts to upgrade the computers,and $300 to advertise them.At this point,what amount should appear in the Inventory account for these computers?
A)$20,000
B)$20,500
C)$22,500
D)$22,800

Question

Quizplus · Accepted Answer

$20,000 + $500 + $2,000 = $22,500
Advertising,rent,etc are considered operating expenses and not included in the cost of inventory.

An Electronics Retailer Purchases $20,000 of Computers for Resale