Dunhams Sporting Goods purchases merchandise with a catalog

Dunhams Sporting Goods purchases merchandise with a catalog list price of $35,000.  The retailer receives a 20% trade discount and credit terms of 2/10, n/30.  What amount should Norfolk debit to the Merchandise Inventory account?

Select one:

a.

$28,000

b.

$20,580

c.

$35,000

d.

$27,440

Solution

Debit to the Merchandise Inventory account = 35000*(1-0.2)= $28000