Jones Manufacturing purchased $10,000 of merchandise inventory on account from a vendor and paid a $500 freight bill. The credit terms are 2/10 or n/30. Because some of the merchandise was not needed, Jones Manufacturing returned $2,000 the same day. Jones Manufacturing uses the perpetual inventory system and made payment for the merchandise, less the return, within the discount period. What is the final cost of the merchandise inventory for Jones Manufacturing from this purchase?
A: 8,000 B: $7,840 C: 8,340 D: $10,094
SOLUTION
The final cost of the merchandise inventory for Jones Manufacturing from this purchase is $8,340 thus Option C is correct.
Net purchases = Purchases - Purchase returns
= $10,000 - $2,000
= $8,000
Net purchases payment after discount = 8,000 - (8,000*2%)
= 8,000 - 160 = 7,840
Final payment = Net purchases payment after discount + Freight charges
= $7,840 + 500 = $8,340
Jones Manufacturing purchased $10,000 of merchandise inventory on account from a vendor and paid a $500...