Jake’s market recorded the following events involving a recent purchase of merchandise: received goods for $60,000, terms 2/10, n/30. returned $1,200 of the shipment for credit. paid $300 freight on the shipment. paid the invoice within the discount period. as a result of these events, the company’s inventory increased by
a. $57,624.
b. $57,918.
c. $57,924.
d. $59,100.

C. $57,924.

Explanation:

Inventory do not only include the purchase price but also includes the cost to bring the inventory at its place.

Therefore, the freight paid for bringing the inventory is included in its cost.

Further the terms of purchase provide, total 30 days credit period and 2% discount if the payment is made within 10 days.

In the given instance there is an outward return of goods worth $1,200

Thus, total goods received = $60,000 - $1,200 = $58,800

Since payment made in 10 days, discount = $58,800 2% = $1,176

Thus, cost of goods excluding freight = $58,800 - $1,176 = $57,624

Total carrying cost of goods = $57,624 + $300 freight in

= $57,924.

answer; post closing trial balance;

answer; monopolistic competition;