In its first year of operations, Dulany Company, a clothing store, purchased $18,000 of merchandise from a supplier on account, terms 2/10, n 30. Dulany Company returned $3,000 of defective merchandise, and then paid the amount due within the discount period. During the year, the company sold merchandise inventory costing $12,000 to its customers. What would be the balance in Dulany’s Company’s Merchandise Inventory account at the end of the year? A. $2,700 B. $3,200 C. $3,300 D. $2,640
In its first year of operations, Dulany Company, a clothing store, purchased $18,000 of merchandise
from a supplier on account, terms 2/10, n 30. Dulany Company returned $3,000 of defective
merchandise, and then paid the amount due within the discount period. During the year, the company
sold merchandise inventory costing $12,000 to its customers. What would be the balance in Dulany’s
Company’s Merchandise Inventory account at the end of the year?
A. $2,700
B. $3,200
C. $3,300
D. $2,640
The purchases returns and purchase discount are deducted from the gross purchases and freight in charges are added to gross purchases to get the net purchases for the period. The ending inventory is the cost of goods that are not sold yet.
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