Question

During February, purchases were $100,000, all on account with terms 2/10, n/30. The cost to ship the purchases was $200 and the purchases were made FOB destination. Due to a problem in the color of some of the products, a purchase allowance was permitted in the amount of $1,000. All purchases were paid for in February, within the discount period. Total net activity in the inventory account in February was A : $97,020. B : $97,000. C : $97,200. D : $97,216.

Answer 1

Total net activity in the inventory account in February was:

D : $97,216.

Step-by-step explanation:

Purchases________________________ 100000

FOB_____________________________ 200

Allowance_______________________ 1000

Debt____________________________ 99200

terms 2/10 n/30___________________ 2%

1984

Net activity in the inventory_________ 97216