A company purchased inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 3/10,n/30.The company paid the shipper $300 cash for freight in.The company then returned damaged goods worth $400.The invoice was then paid eight days after the invoice date.Assuming that there was no beginning inventory balance,the cost of inventory would be ________.(Assume a perpetual inventory system.)
A) $1,552
B) $1,852
C) $1,700
D) $1,940

Question

Quizplus · Accepted Answer

The cost of inventory calculation: - Initial purchase: $2,000- Less returns: $400 (new total $1,600)- Add freight in: $300- Less discount (3% of $1,600): $48Final cost: $1,600 + $300 - $48 = $1,852.

A Company Purchased Inventory for $2,000 from a Vendor on Account,FOB