Glenn Company purchased merchandise inventory with an invoice price of $7,000 and credit terms of 3/10, n/30. What is the net cost of the goods if Glenn Company pays within the discount period? A. $7,000 B. $6,440 C. $6,860 D. $6,790

d. $6,790

Explanation:

Data provided as per the question

Purchase price = $7,000

Discount = 3% on selling price

The computation of net cost of the goods is given below:-

Net cost of the goods  = Purchase price - Discount

= $7,000 - ($7,000 × 3%)

= $7,000 - 210

= $6,790

Therefore for computing the net cost of the goods we simply deduct the discount from the purchase price.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23