5. If the catalog price of an item is $ 20,000 with a trade discount offer of 3/5/10, the invoice price using gross method would be what amount?

a) 19,400

b) 16,587

c) 20,000

d) 18,000

6. Dunkin Inc purchased inventory for $ 6000, cash discount terms of 4/10,n30 on February 10, 2018. The company uses net method to record purchases. What amount should be recorded in the purchases account?

a) 5760

b) 6000

c) 240

d) 6240

7. If the gross method is used, inventory with a list price of $ 8000, subject to a trade discount of 5/5/10 and a cash discount of 2/15,n30 should be recorded at a cost of what amount?

a) 6,498

b) 6,368.04

c) 8,000

d) 7,220

8. Allen Inc uses net method to record purchases. An invoice dated January 10 for $ 3400 cash discount terms 3/15,n30 was paid on February 1. Which partial entry below is correct?

a) Debit accounts payable for 3400.

b) Credit accounts payable for 102

c) Debit discount lost for 102

d) Credit cash for 3298