Answer :
To solve:
Total cost of merchandise = [(purchased merchandise - returned merchandise) x percentage out of hundred - 1] + transportation cost
Total cost of merchandise = [($4,300 - $295 ) .99] + $380
Total cost of merchandise = ($4,005)(.99) + $380
Total cost of merchandise = $3,964.95 + $380
Total cost of merchandise = $4,344.95
Total cost of merchandise = [(purchased merchandise - returned merchandise) x percentage out of hundred - 1] + transportation cost
Total cost of merchandise = [($4,300 - $295 ) .99] + $380
Total cost of merchandise = ($4,005)(.99) + $380
Total cost of merchandise = $3,964.95 + $380
Total cost of merchandise = $4,344.95
Answer:
Cost of inventory includes all costs paid by company to bring inventory to its wareshouse. It includes all expenses except expenses that can be classified as selling and admin expenses. So to determine total cost of inventory we will add all costs and subtract cash discount from it. Please note that cash discounts are part of inventory cost but early payment discounts are not deducted from inventory cost.
Detail calculation is given below.
Purchase price $ 4300
Transportation cost $ 380
purchase return ($ 295)
Cash discount ($ 40.05) (4300-295)*1%
Total cost $ 4344.95