A company purchased inventory for $ 72,000 from a vendor on account, FOB shipping point, with terms of 33/10, n/30. The company paid the shipper $1,500 cash for freight in. The company paid the vendor nine days after the invoice date. If there was no beginning inventory, the cost of inventory would be .

$71,340

Explanation:

The computation of the cost of inventory is shown below:

= Purchase value of inventory - discount charges + freight charges

where,

Purchase value of an inventory = $72,000

Discount charges = $72,000 × 3% = $2,160

Freight charges = $1,500

So, the cost of inventory is

= $72,000 - $2,160 + $1,500

= $71,340

The discount terms is 3% if payment is made within 10 days and total time of payment is 30 days instead of 33%

the first one $24,630