Question

Tony’s Market recorded the following events involving a recent purchase of inventory: Received goods for $80,000, terms 2/10, n/30. Returned $1,600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company’s inventory
A. increased by $76,832.
B. increased by $78,800.
C. increased by $77,224.
D. increased by $77,232.

Answer 1

Answer:

Correct option is D

Answer is increased by $ 77232

Explanation:

Effect on Inventory:    

Increase due to purchase $80000  

Decrease due to return   -$1600  

Increase for freight paid  $400  

Decrease for discouont availed -$1568 (78400*2%)

Net Increase in Inventor =$77,232