Nida Hat Shop received a shipment of hats for which it paid the wholesaler $2,940

Marketing Dec 20, 2020

Nida Hat Shop received a shipment of hats for which it paid the wholesaler $2,940. The price of the hats was $3,000, but Nida was given a $60 cash discount and required to pay freight charges of $75. What amount should Nida include in inventory?

Expert Solution

The answer is $3,015

	Amount
Purchases	$3,000
Less: Purchase Discount	60
Add: Freight In	75
Net Purchases	$3,015

Purchase Discount is a deduction in computing inventory. Freight In is added in capitalizable as value of inventory.

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