Question

A company had purchased $10,000 of inventory in the month of January, took advantage of purchase discounts of $500, and paid $1000 to have the goods shipped to their factory. They paid $250 to insure the inventory against fire and spent $750 to store the inventory. The company did not return any of the inventory they purchased. What is the company's 'net purchases' for the month of January?

Answer 1

Answer:

The company's net purchases for the month of January is $11,500

Explanation:

Item description                   Amount ($)

Purchase price                         10,000

Less: purchase discount             -500

Add: purchasing related costs  

        Shipping costs                   +1,000

        Fire insurance                    +250

        Inventory storage costs    +750

Net purchases                          11,500