Analyze purchases of merchandise inventory. (LO 1)

International Sports Merchandising Inc. made the following purchases in August of the current year.

August 5 Purchased \(\$ 12,200\) of athletic shoes, terms \(1 / 15, \mathrm{n} / 20\), FOB destination August 14 Purchased \(\$ 11,600\) of training gear, terms \(2 / 10, \mathrm{n} / 15\), FOB shipping point August 19 Purchased \(\$ 3,500\) of tennis rackets and tennis balls, terms \(3 / 05\), \(\mathrm{n} / 10\), FOB destination

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a. For each purchase, by what date is the payment due, assuming the company takes advantage of the discount?

b. For each purchase, when is the payment due if the company does not take advantage of the discount?

c. In each case, what is the amount of the cash discount allowed?

d. Assume the freight charges are \(\$ 170\) on each purchase. For which purchases is International Sports Merchandising responsible for the freight charges?

e. What is the total amount of inventory costs for the month of August, assuming that all discounts were taken?