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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 38,300ofmerchandiseandpaidfreightchargesof38,300 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?

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Solution

To find the total purchases returns and allowances for March, you need to follow these steps:

  1. First, calculate the total cost of purchases including freight charges. This is done by adding the cost of merchandise to the freight charges. So, 38,300(costofmerchandise)+38,300 (cost of merchandise) + 5,370 (freight charges) = $43,670.

  2. Then, subtract the net delivered cost of purchases at the end of March from the total cost calculated in step 1. So, 43,670(totalcostfromstep1)43,670 (total cost from step 1) - 33,980 (net delivered cost of purchases) = $9,690.

Therefore, the total purchases returns and allowances for March is $9,690.

This problem has been solved

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