Question

g Our company purchases $4,000 worth of merchandise inventory on credit with the terms 2/10, n/30. Transportation costs were an additional $200. Our company returned $300 worth of merchandise. What is the total cost of this merchandise if our company paid the invoice within the discount period

Answer 1

Answer: $3,826

Explanation:

Discount received on terms 2/10 = (Purchase value  – Cost of merchandise returned) x Discount Rate

= $4,000 - $300 x 2%

= $3,700 x 2%

= $74

 if the company paid the invoice within the discount period, Then the total cost of this merchandise

Total cost of merchandise =  Value of merchandise purchased– Cost of merchandise returned + Transportation Costs - Amount of discount received

= $4,000 - $300 + $200 - $74

= $3,826