Question
On December 22, 2019 Buyer Company placed an order to purchase merchandise on account from Seller, Inc. Seller lists the merchandise in the online catalog
On December 22, 2019 Buyer Company placed an order to purchase merchandise on account from Seller, Inc. Seller lists the merchandise in the online catalog at a price of $8,000 and carries the goods on the balance sheet at a historical cost of $2,700. Buyer Company is a good customer and was able to negotiate the following terms: (i) a 2.5% trade discount and (ii) payment terms of 1/10, n/30. The goods were shipped by Seller, Inc with the terms FOB shipping point on December 28, 2019 and were delivered to Buyers facility on January 4, 2020. On December 28 (i.e., at the time of shipment), Seller, Inc. paid $240 of shipping cost and on January 4, (at the time of delivery) Buyer Company returned $700 of merchandise to Seller (the returned items had an original cost to Seller of $280). Buyer paid Seller in full on January 5. Consider the above facts and select the answer choice below that shows the final recorded value of inventory reported by Buyer Company for this transaction. (Round your final answers to the nearest $1).
A.
$7,220
B.
$7,262
C.
$7,269
D.
$7,340
E.
$7,029
F.
None of the answer choices provided are correct.
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