A company purchased inventory for $3,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid $100 cash for freight in.The entry to record payment of invoice within 2 days by the purchaser would include ________.(Assume a perpetual inventory system. )
A)a debit to Accounts Payable for $2,940 and a credit to Cash for $2,940
B)a debit to Accounts Payable for $3,000,a debit to Merchandise Inventory for $100,and a credit to Cash for $2,900
C)a debit to Accounts Payable for $3,000,a credit to Merchandise Inventory for $60,and a credit to Cash for $2,940
D)a debit to Accounts Payable for $2,940,a debit to Merchandise Inventory for $60,and a credit to Cash for $3,000

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Since the terms are FOB shipping point, the buyer is responsible for paying the freight costs. Therefore, the cost of $100 for freight in is added to the cost of the inventory. The invoice amount is $3,000, but the buyer can take advantage of the discount if payment is made within 10 days, which amounts to 2% of $3,000 or $60. Therefore, the entry to record payment within the discount period would be a debit to Accounts Payable for $3,000, a credit to Merchandise Inventory for $60 ($3,000 x 2%), and a credit to Cash for $2,940 ($3,000 - $60 + $100).

A Company Purchased Inventory for $3,000 from a Vendor on Account,FOB