Question

Willetta Company purchases inventory for $29,000 with terms 2/10, n/30. It then returns $3,900 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $290. The company pays the amount due within the discount period. What is the amount of the discount that will be taken

Answer 1

Discount taken is $496.20

Step-by-step explanation:

The amount of purchases after some items were returned and also defective inventory allowance was taken needs to first of all be established.

adjusted purchases=$29,000-$3,900-$290=$ 24,810.00

Thereafter, the amount of discount taken is 2% of the adjusted purchases amount computed above.

Discount taken=$ 24,810.00*2=$ 496.20