Question

An item was shipped from a supplier under FOB shipping point. The invoice in the amount of $2,000 included payment terms of 2/10, n/30. When the invoice was paid, a purchase discount in the amount of $40 was taken. Other details relating to the purchase of this item included the following: freight charges of $300, import duties of $50, and insurance premiunm of $100. The cost of this inventory item is:________.

1. $1,960
2. $2,410
3. $2,401
4. $2,404

Answer 1

$2,410

Step-by-step explanation:

Given that

Invoice Amount = $2,000

Purchase discount = $40

Freight charges = $300

Import duties = $50

Insurance Premium = $100

So,the calculation of the cost of this inventory is given below:-

= Invoice Amount - Purchase discount + Freight charges + Import duties + Insurance Premium

= $2,000 - $40 + $300 + $50 + $100

= $2,410