Katz Hat Shop received a shipment of hats for which it paid the wholesaler $2,970. The price of the hats was $3,000 but Katz was given a $30 cash discount and required to pay freight charges of $50. In addition, Katz paid $130 to cover the travel expenses of an employee who negotiated the purchase of the hats.
What amount will Katz record for inventory? Why?