Vaughn's Market recorded the following events involving a recent purchase of inventory: Received goods for $132000, terms 2/15, n/30. Returned $2600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by $126812. increased by $129800. increased by $127204. increased by $127212.
Vaughn's Market recorded the following events involving a recent purchase of inventory: Received goods for $132000, terms 2/15, n/30. Returned $2600 of the shipment for credit. Paid $400 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's inventory increased by $126812. increased by $129800. increased by $127204. increased by $127212.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I got this question wrong and I'm not sure why. The correct answer is 127212 but I am not sure how to get to that number.

Transcribed Image Text:**Inventory Purchase Analysis at Vaughn’s Market**
Vaughn’s Market recorded the following events involving a recent purchase of inventory:
- Received goods valued at $132,000 with terms 2/15, n/30.
- Returned $2,600 worth of the shipment for credit.
- Paid $400 for freight on the shipment.
- Settled the invoice within the discount period.
**Resulting Changes in Inventory Value:**
Given these transactions, the company’s inventory has increased by one of the following amounts:
- $126,812
- $129,800
- $127,204
- $127,212
**Explanation of Options:**
Each option represents a potential calculation outcome based on applying the purchase terms, return, and additional costs. Evaluating these will help determine the precise impact on inventory cost, considering discounts and expenses.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education