A company using the perpetual inventory system purchased inventory worth $21,000 on account with terms of 3/10, n/30. Defective inventory of $1,000 was returned two days later, and the accounts were appropriately adjusted. If the invoice is paid within 10 days, the amount of the purchase discount that would be available to the company is .

$400

Explanation:

Given,

Purchase merchandise inventory = $21,000

Less: Purchase return (Defective) = ($ 1,000)

Remaining values to be paid         = $20,000

We know, 3/10, n/30 means 3% discount will be given to the customer if the customer pays within 10 days. However, the customer has to pay the bill within 30 days.

As the company pays the invoice within 10 days, the purchase discount that would be available to the company is

= $20,000 × 2% = $400.

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