A Company Purchased Inventory for $75,000 from a Vendor on Account

question 140

Multiple Choice

A company purchased inventory for $75,000 from a vendor on account, FOB shipping point, with terms of 3/10, n/30. The company paid the shipper $1,500 cash for freight in. The company paid the vendor 9 days after the sale. If there was no beginning inventory, the cost of inventory would be: (Assume a perpetual inventory system)

• A)$74,250.
• B)$76,500.
• C)$71,295.
• D)$73,500.

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Definitions:

FICA-OASDI

The portion of the Federal Insurance Contributions Act tax that funds the Social Security program, covering retirement, disability, and survivors' benefits.

Payroll Taxes

Taxes imposed on employers and employees, based on the wages the employer pays to the employees.

Hours

Units of time equal to 60 minutes, often used to measure work or billing time in various contexts.