Company B Purchased Merchandise Inventory With An Invoice Price Of $15,000 And Credit Terms Of 2/10, N/30. What Is The Net Cost Of The Goods If Company B Pays Within The Discount Period?
From the points view of company B’s business, it is purchaser who purchased merchandise inventory from seller. The correct option of this multiple choice question (mcq) is (c) as proved below: We are given the following: Invoice Price = $15,000 Credit Terms = 2% discount is given by seller to purchaser (company B), if it paid within 10 days. While total time period to make payment is 30 days after which the due time period has expired. Find: Here, we need to calculate the net cost of goods (NCOG) = ? NCOG = Invoice Price - Discount Discount = Invoice Price X 2/100 = $15,000 X 2/100 = $300 So, we get the following: NCOG = $15,000 - $300 = $14,700 The journal entry related to discount get by the company B when the payment is made within the discount period is shown below: For Company B (Purchaser), assuming the company B uses periodic inventory system Accounts Payable a/c $15,000 ...