During March a firm purchased $38,300 of merchandise and paid freight charges of $5,370. If the net delivered cost of purchases at the end of March is $33,980, what is the total purchases returns and allowances for March?
Question
During March a firm purchased 5,370. If the net delivered cost of purchases at the end of March is $33,980, what is the total purchases returns and allowances for March?
Solution
To find the total purchases returns and allowances for March, you need to follow these steps:
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First, calculate the total cost of purchases including freight charges. This is done by adding the cost of merchandise to the freight charges. So, 5,370 (freight charges) = $43,670.
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Then, subtract the net delivered cost of purchases at the end of March from the total cost calculated in step 1. So, 33,980 (net delivered cost of purchases) = $9,690.
Therefore, the total purchases returns and allowances for March is $9,690.
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