question archive Conway Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30
Conway Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30
Subject:BusinessPrice:2.88 Bought3
Conway Company purchased merchandise inventory with an invoice price of $9,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?
a. $9,000
b. $8,820
c. $8,100
d. $8,280
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Answer: b. $8,820
Explanation:
Purchased merchandise with credit terms of 2/10, n/30 mean that a 2% discount can be availed if payment is made within 10 days. Otherwise, full amount is due within 30 days.
The net cost of goods if Conway Company pays within the discount period is computed as follows:
| Invoice price | $9,000 |
| Less: Discount ($9,000 * 2%) | $180 |
| Net cost of goods | $8,820 |
|---|
