During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,800 from Diamond Inc. with terms 3/12, n/45. 5 Returned goods costing $1,450 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,350 with terms 3/12, n/45. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. 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.

Question

Deborah

Business

16 March, 07:39

During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $4,800 from Diamond Inc. with terms 3/12, n/45. 5 Returned goods costing $1,450 to Diamond Inc. for credit on account. 6 Purchased goods from Club Corp. for $1,350 with terms 3/12, n/45. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. 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.

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Alejandra Robinson · Answer 1

Solution and Explanation:

Calculation of the cost of inventory as of June is as follows:

Particulars Amount Amount

(in dollars) (In dollars)

Begnining inventory 0.00

Purchases:

June 3rd from D inc. 4800

June 6th from C corp. 1350 6150

Total available 6150

Less: Returned to D Inc. 1450

Less: the allowance and discounts 100.50 1550.50

(($4800 minus $1450) multiply 3 percent)

Cost of the inventory as of June 30 4599.50

Thus, the cost of inventory as per the above calculations is $4599.50