An electronics retailer purchases $20,000 of computers for resale.The retailer spends $500 in transportation cost,$2,000 in labour and parts to upgrade the computers,and $300 to advertise them.At this point,what amount should appear in the Inventory account for these computers?
A)$20,000
B)$20,500
C)$22,500
D)$22,800

Question

Quizplus · Accepted Answer

The cost of the computers includes the purchase price, transportation cost, labor and parts for upgrades, and advertising costs. Therefore, the amount that should appear in the Inventory account is $20,000 + $500 + $2,000 + $300 = $22,500.

An Electronics Retailer Purchases $20,000 of Computers for Resale