Question

JDC purchased inventory for $5000 and also paid a $300 freight in bill. JDC returned half the goods to the seller and later took a 2% purchase discount. What is JDC's cost of the inventory that it kept?

A) $2700
B) $2800
C) $2750
D) $2500

Answer 1

JDC's cost of the inventory after taking into account the freight cost, return of goods, and purchase discount is closest to $2750 (Option C).

Step-by-step explanation:

To calculate JDC's cost of the inventory that it kept, we must account for the cost of the inventory purchased, the freight cost, the return of goods, and the purchase discount.

• Initial Inventory Cost: $5000
• Freight Cost: $300
• Total Cost Before Return: $5300

JDC returned half the goods, so the cost of returned goods would be $5000 / 2 = $2500. Subtracting this from the total cost before return gives us $5300 - $2500 = $2800.

JDC then took a 2% purchase discount on the remaining cost. The discount amount is 2% of $2800, which is $2800 * 0.02 = $56. When we subtract the discount from the remaining cost, we get $2800 - $56 = $2744.

Since there are no options that exactly match $2744, the closest option and thus the correct answer is C) $2750.