Deborah Hart’s Professional Costumers, Inc., made the following purchases in November of the current year:

November 7Purchased $2,500 of merchandise, terms 3/15, n/20, FOB shipping point

November 12Purchased $4,300 of merchandise, terms 1/05, n/25, FOB destination

November 16Purchased $6,200 of merchandise, terms 2/10, n/40, FOB shipping point

Requirements

1. For each of the listed purchases, how many days does the company have to take advantage of the purchase discount?

2. What is the amount of the cash discount allowed in each case?

3. Assume the freight charges are $115 on each purchase. What is the amount of freight that Professional Costumers must pay for each purchase?

4. What is the total cost of inventory for Professional Costumers for the month of November, assuming that all discounts were taken?