Foxtrot Co. started 2021 with $113,000 of merchandise inventory on hand. During 2021, $480,000 in merchandise was purchased on account with credit terms of 2/15, n/45. All discounts were taken. Purchases were all made f. o.b. shipping point. Foxtrot paid freight charges of $7,900. Merchandise with an invoice amount of $3,600 was returned for credit. Cost of goods sold for the year was $376,000. Foxtrot uses a perpetual inventory system.

What is ending inventory assuming Foxtrot uses the gross method to record purchases?

a. $188,200.
b. $192,600.
c. $179,088.
d. $179,028.

$211,772

Explanation:

The computation of ending inventory is shown below:-

Discount = ($480,000 - $3,600) × 2%

= $9,528

Cost of goods for sale = Beginning inventory + purchases - returns at invoice price - Discounts + Freight - Cost of goods sold

= $113,000 + $480,000 - $3,600 - $9,528 + $7,900

= $587,772

Ending inventory = Cost of goods for sale - Cost of goods sold

= $587,772 - $376,000

= $211,772

So, the right answer is $211,772. Hence the option is not available.

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

a) both were commissioned explorers