Suzie’s Shoes purchased inventory from Shoes Galore with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Suzie’s Shoes pays Shoes Galore within the discount period?Group of answer choices$4,800$4,900$5,000$5,100
Question
Suzie’s Shoes purchased inventory from Shoes Galore with an invoice price of 4,8005,000$5,100
Solution
Step 1: Understand the credit terms. The credit terms of 2/10, n/30 mean that Suzie's Shoes can take a 2% discount if they pay within 10 days. If they don't take the discount, the full amount is due in 30 days.
Step 2: Calculate the discount. The discount is 2% of the invoice price. So, the discount is 100.
Step 3: Calculate the net cost of the goods. The net cost of the goods is the invoice price minus the discount. So, the net cost of the goods is 100 = $4,900.
So, the correct answer is $4,900.
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