Question

A company had purchased $10,000 of inventory in the month of January, took advantage of purchase discounts of $500, and paid $1000 to have the goods shipped to their factory. They paid $250 to insure the inventory against fire and spent $750 to store the inventory. The company did not return any of the inventory they purchased. What is the company's 'net purchases' for the month of January?

Answer 1

The company's net purchases for the month of January is $11,500

Step-by-step explanation:

Item description Amount ($)

Purchase price 10,000

Less: purchase discount -500

Add: purchasing related costs

Shipping costs +1,000

Fire insurance +250

Inventory storage costs +750

Net purchases 11,500