Question

If the beginning balance in Firestone Auto Repair's inventory account was a $4,000 debit, what is the new balance in the inventory account after considering the new purchases?

Answer 1

Answer:

$9,870

Explanation:

The computation of the  new balance in the inventory account after considering the new purchases is given below;

New balance is

= Beginning balance + value of the purchase.

where,  

Value of the purchase = purchase cost + freight cost- purchase discount

= $6,000 + $170 - $300

= $5,870

So,  

New balance is

= $4,000 + $5,870

= $9,870