A company purchased $3,300 worth of merchandise. Transportation costs were an additional $290. The company returned $230 worth of merchandise and then paid the invoice within the 3% cash discount period. The total cost of this merchandise is:

a. $3,240.00.

b. $3,093.00.

c. $3,261.00.

d. $3,267.90.

e. $3,360.00.

The correct answer is option (D).

Explanation:

According to the scenario, the given data are as follows:

Purchase cost = $3,300

Transportation cost = $290

Return value = $230

Discount rate = 3%

So, the total cost of merchandise can be calculated as follows:

First we less the return value from purchase value. Then,

= $3,300 - $230 = $3,070

Now, we less the discount, then

3% of $3,070 = $92.10

Net purchase value = $3070 - $92.10 = $2977.90

Now, we add the transportation cost in purchase value. then,

= $2977.90 + $290

= $3,267.90

Hence, the total cost of this merchandise is $3,267.90