1.33 points E6-7 Reporting Purchases and Purchase Discounts Using a Perpetual In

Question

1.33 points E6-7 Reporting Purchases and Purchase Discounts Using a Perpetual Inve During the months of January and February, Axe Corporation purchased goods from three suppliers. The sequence of events was as follows Jan. 6 Purchased goods for $1,300 from Green with terms 3/12, n/45. 6 Purchased goods from Munoz for $950 with terms 3/12, n/45. 14 Paid Green in full. Feb. 2 Paid Munoz in full. 28 Purchased goods for $400 from Reynolds with terms 3/12, n/45. equired: Assume that Axe uses a perpetual inventory system, the company had no inventory on hand at the beginning of January, and no sales were made during January and February, Calculate the cost of inventory as of February 28 t of Invento S2,611 References eBook & Resources

Explanation / Answer

Calculate ending inventory :

Cost of inventory $2611

Jan 6 Purchase 1300 Jan 6 Purchase 950 Less: Purchase discount from Green (1300*3%) (39) No purchase discount from Munoz Feb 28 purchase 400 Total cost of inventory 2611

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