Question

Concord Co. purchased goods with a list price of $173,700, subject to trade discounts of 20% and 10%, with no cash discounts allowable. How much should Concord Co. record as the cost of these goods

Answer 1

The cost of these goods is $125,064

Step-by-step explanation:

The computation of the cost of these goods is shown below:

= Purchase price - trade discount - trade discount

= $173,700 - $173,700 × 20% - ($173,700 - $34,740) × 10%

= $173,700 - $34,740 - $138,960 × 10%

= $173,700 - $34,740 - $13,896

= $125,064

hence, the cost of these goods is $125,064

And, the same is to be considered

We simply applied the above formula