Question

A company using the perpetual inventory system purchased inventory worth $21,000 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

The amount of the purchase discount that would be available to the company is $360.

Step-by-step explanation:

To calculate the purchase discount, we need to determine how much of the inventory is eligible for the discount and then calculate the discount amount. The amount of the purchase discount that would be available to the company is $360.

The terms of the purchase are 2/10, n/30, which means that the company can take a 2% discount if the invoice is paid within 10 days. In this case, the inventory was purchased on account with a value of $21,000. However, $3,000 worth of defective inventory was returned, so we need to deduct that from the total.

Amount of eligible inventory = $21,000 - $3,000 = $18,000

Discount amount = $18,000 × 2% = $360