Question

A company purchased inventory for $ 2 comma 000 from a vendor on​ account, FOB shipping​ point, with terms of 2​/10, ​n/30. The company paid the shipper $ 200 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.)

Answer 1

Answer:

Inventory would be 1, 768

Explanation:

2,000  goods

 +200  freight-in (A)

  -400  returned goods

    -32 discount (B)

1, 768 net amount for inventory

Notes:

(A) The freight-in will be included in the inventory, as is a cost needed to have the inventory in the company's possession and be ready to use or sell.

(B) goods x discount rate

net goods 2,000 - 4,00 return = 1,600

discount for payment within 10 days 2%

Discount on purchase: 1,600 x 2% = 32