On June 30 the general ledger of Kisling, Inc., had the following balances:

Purchases $ 42,880 Dr.
Freight In 2,376 Dr.
Purchases Returns and Allowances 2,960 Cr.
Purchases Discounts 2,050 Cr.

Compute the net delivered cost of purchases for Kisling, Inc.

Cost of Net Purchases =  $ 426166

Explanation:

Kisling, Inc

Purchases $ 42,880 Dr.

Add Freight In 2,376 Dr.

Less Purchases Returns and Allowances 2,960 Cr.

Less Purchases Discounts 2,050 Cr.

Net Purchases =  $ 426166

The freight in are the carriage costs that increase the cost of purchases. The purchase returns are the returns which reduce the amount of purchases and the discounts also decrease the cost of  net purchases.

This can be calculated using a T account.

Purchases               Purchases Returns

$ 428800                           $ 2960

Freight In                    Purchase Discounts

$ 2376                            $ 2050

                                Net Purchases 426166

431176                                431176

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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