Question

Glenn Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Glenn Company pays within the discount period? a. $8,100 b. $8,280 c. $8,820 d. $9,000

Answer 1

The correct answer is B

Step-by-step explanation:

The net cost of goods is computed as if the paid in the discounting period:

Net Cost of goods = Inventory cost - (Inventory cost × Discounting percentage)

where

Inventory cost is $9,000

Discounting percentage is 2%

Putting the values above:

Net Cost of goods = $9,000 - ($9,000 × 2%)

Net Cost of goods = $9,000 - $180

Net Cost of goods = $8,280

Therefore, the amount of $8,280 will be paid by the company if paid within the discounting period and avail the discount of $180.