Question

Tony's Market recorded the following events involving a recent purchase of inventory: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

Answer 1

Answer:

balance of 38,616 debit

Explanation:

     Inventory

Debits    Credits

40,000(A)

              800(B)

   200(C)

              784(D)

38616

(A) the recieved goods increase the inventory balance

(B) when returning the inventory decrease

(C) the shipment cost are necessary to get the ivnentory so are capitalized

(D) the discount decrease both, the cost of inventory and the cash disbursements.

adjusted invoice nominal:

40,000- 800 = 39,200

the commercial terms state a 2% discount which the company received:

39,200 x 0.02 = 784