Understanding Acme Company's Merchandise Inventory Purchase

What are the credit terms associated with Acme Company's purchase of merchandise inventory?

What is the net cost of the goods if Acme Company pays within the discount period?

Credit Terms:

The credit terms associated with Acme Company's purchase of merchandise inventory are 2/10, n/30.

Net Cost Calculation:

If Acme Company pays within the discount period, the net cost of the goods will be $11,760.

Acme Company recently purchased merchandise inventory with an invoice price of $12,000 and credit terms of 2/10, n/30. This means that they can receive a 2% discount if they pay the invoice within 10 days, with the full payment due within 30 days without any discount.

To calculate the net cost of the goods if Acme Company pays within the discount period, we first determine the discount amount by multiplying the invoice price by the discount percentage:

Discount amount = Invoice price * Discount percentage

Discount amount = $12,000 * 0.02

Discount amount = $240

Subtracting the discount amount from the invoice price gives us the net cost of the goods:

Net cost of the goods = Invoice price - Discount amount

Net cost of the goods = $12,000 - $240

Net cost of the goods = $11,760

By paying within the discount period, Acme Company can reduce their net cost of the purchased goods to $11,760, saving $240 in the process.