Business Accounting (Merchandising)

Question

Merchandise with an invoice price of RM15,000 is purchased with terms of 3/10, n/45, FOB shipping point. Transportation costs paid by the buyer were RM162. What is the cost of the merchandise purchased if payment is made during the discount period? 

 

A. RM14,712.00 

B. RM14,707.14 

C. RM15,162.00 

D. RM15,000.00 

Answer 1

For this problem, you'd reduce the invoice price by the discount taken and then add the transportation cost.

So, it would be:

15,000 x 3% = 450 (discount amount)

15,000 - 450 = 14,550 (discounted inventory cost)

14,550 + 162 = 14,712 (total inventory cost)

Hope this helps!

Scott