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10 May, 02:51

Swifty's Market used the perpetual method to record the following events involving a recent purchase of inventory:

Received goods for $118000, terms 2/8, n/30.

Returned $2300 of the shipment for credit.

Paid $300 freight on the shipment.

Paid the invoice within the discount period.

As a result of these events, the company's inventory

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  1. 10 May, 03:05
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    The company's inventory is $113,686

    Explanation:

    The computation of the company inventory is shown below:

    = Purchase of inventory - returned goods - discount of net purchase + freight expenses

    = {$118,000 - $2,300 - 2% * (118,000 - $2,300) + $300}

    = {$115,700 - $2,314 + $300}

    = $113,686

    It is already mentioned in the question that the invoice amount is paid with the discount period so we apply the discount rate
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