Homework Answers
Net Cost of Inventory Purchased = $741560
| Discount will be given by Supplier | ||
| 05-Mar | Inventory Purchased | 800000 |
| 13-Mar | Purchase returns | -50000 |
| 14-Mar | Allowances | -14000 |
| 736000 | ||
| Discount | (4% on $736000) | 29440 |
| Amount net of discount | 706560 | |
| Add : Freight | 35000 | |
| 741560 |
It is assumed that discount terms does not include freight
In Perpetual system, all expenses, discounts, allowances relating to purchase of inventory are charged to Inventory Account.
(Hope you will understand this, Please give your valuable feedback and if you have any query relating to this kindly mention in comment section)
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