Norfolk Sporting Goods purchases merchandise with a catalog list price of $14,600. The retailer receives a 25% trade discount and credit terms of 2/10, n/30. What amount should Norfolk debit to the merchandise inventory account (Round your answer to the nearest dollar) ?

The amount should Norfolk debit to the merchandise inventory account is $10,731

Explanation:

In order to calculate the amount should Norfolk debit to the merchandise inventory account we would have to make the following calculation:

amount should Norfolk debit to the merchandise inventory account=Price net trade of discount-cash discount

Price net trade of discount=List price-trade discount

Price net trade of discount=$14,600-$14,600*25%

Price net trade of discount=$14,600-$3,650

Price net trade of discount=$10,950

cash discount=$10,950*2%

cash discount=$219

Therefore, amount should Norfolk debit to the merchandise inventory account=$10,950-$219

amount should Norfolk debit to the merchandise inventory account=$10,731