Question

A company using the perpetual inventory system purchased inventory worth​ $20,000 on account with terms of​ 2/10, n/30. Defective inventory of​ $3,000 was returned two days​ later, and the accounts were appropriately adjusted. If the invoice is paid within 10​ days, the amount of the purchase discount that would be available to the company is​ ________.

Answer 1

$340

Step-by-step explanation:

The computation of the purchase discount is shown below:

The discount = (Purchase of Merchandise amount - defective inventory returned amount) × discount rate

= ($20,000 - $3,000) × 2%

= $17,000 × 2%

= $340

We simply deduct the defective inventory from the merchandise amount and then multiply it by the discount rate so that the correct amount of discount can come.