Question

Glenn Company purchased merchandise inventory with an invoice price of $7,000 and credit terms of 3/10, n/30. What is the net cost of the goods if Glenn Company pays within the discount period? A. $7,000 B. $6,440 C. $6,860 D. $6,790

Answer 1

d. $6,790

Step-by-step explanation:

Data provided as per the question

Purchase price = $7,000

Discount = 3% on selling price

The computation of net cost of the goods is given below:-

Net cost of the goods = Purchase price - Discount

= $7,000 - ($7,000 × 3%)

= $7,000 - 210

= $6,790

Therefore for computing the net cost of the goods we simply deduct the discount from the purchase price.