Howard Company purchased merchandise inventory with an invoice price of $7,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Howard Company pays within the discount period?

Howard Company purchased merchandise inventory with an invoice price of $7,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Howard Company pays within the discount period?

Answer:the net cost of goods sold is $6,860Explanation:The computation of the net cost of goods sold is shown below:

The Net cost of the goods sold is

= Amount × ( 1 – Discount rate)

= $7,000 × ( 100% -2%)

= $7,000 × 98%

= $6,860

Hence,

the net cost of goods sold is $6,860We simply applied the above formula so that the correct value could come

And, the same is to be considered