Question

Zephron Music purchased inventory for $4,400 and also paid a $260 freight bill. Zephron Music returned 25​% of the goods to the seller and later took a 1​% purchase discount. Assume Zephron Music uses a perpetual inventory system. What is Zephron Music​'s final cost of the inventory that it​ kept? (Round your answer to the nearest whole​ number.)

Answer 1

Answer:

Cost of the inventory kept by Zephron Music is $3495

Explanation:

Zephron Music purchased inventory for $4,400 and also paid a $260 freight bill

Inventory $4660 (debit)

Trade Payable $ 4400 (credit)

Bank $260 (credit)

Recognise an Asset - Inventory and De-recognise asset - Bank

Zephron Music returned 25​% of the goods to the seller, took a 1​% purchase discount

Trade Payable $1212

Inventory $1165 (credit)

Discount Received $47 (credit)

Therefore Inventory Balance = $4660-1165 = $3495