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29 November, 18:33

Freeman Corporation, which uses a perpetual inventory system, bought inventory for $10,000 and paid $300 freight on the purchase. Freeman returned goods that cost $2,000 and paid for the goods within the 2% discount period. As a result of these transactions, the inventory account increase bya $10,000. b $8,140. c $0. d $7,840.

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  1. 29 November, 19:38
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    b. $8,140

    Explanation:

    The computation is shown below:

    = Merchandise amount - return and allowances - discount + freight charges

    = $10,000 - $2,000 - $160 + $300

    = $8,140

    The discount = (Merchandise amount - return and allowances) * discount rate

    = ($10,000 - $2,000) * 2%

    = $160

    Simply we deduct the returned inventory and discount expense and added the freight charges to the merchandise amount
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