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20 November, 20:22

Willetta Company purchases inventory for $29,000 with terms 2/10, n/30. It then returns $3,900 of the inventory purchased to the supplier and also receives an allowance for defective inventory of $290. The company pays the amount due within the discount period. What is the amount of the discount that will be taken

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  1. 20 November, 21:38
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    Discount taken is $496.20

    Explanation:

    The amount of purchases after some items were returned and also defective inventory allowance was taken needs to first of all be established.

    adjusted purchases=$29,000-$3,900-$290=$ 24,810.00

    Thereafter, the amount of discount taken is 2% of the adjusted purchases amount computed above.

    Discount taken=$ 24,810.00*2=$ 496.20
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