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 g

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?

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  1. Answer:

    the net cost of goods sold is $6,860

    Explanation:

    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 $6,860

    We simply applied the above formula so that the correct value could come

    And, the same is to be considered

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