During the month of June Ace Incorporated purchased goods fr

During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows:

Required:

Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30.

June		3		Purchased goods for $5,000 from Diamond Inc. with terms 2/10, n/30.
		5		Returned goods costing $1,000 to Diamond Inc. for credit on account.
		6		Purchased goods from Club Corp. for $950 with terms 2.5/10, n/30.
		11		Paid the balance owed to Diamond Inc.
		22		Paid Club Corp. in full.

Solution

3-Jun Cost of goods 5,000 5-Jun Purchase returned -1,000 6-Jun purchase of goods 950 11-Jun purchase allowance (4000*2%) -80 Cost of inventory 4,870 answer