Lite Foot Shoe Wholesalers incurred the following costs related to its inventory during February:
a. Invoice from manufacturer for goods purchased $250,000
b. Cash discounts available and taken 2%
c. Shipping paid on purchases $ 3,000
d. Shipping paid on sales $ 5,000
e. Insurance on purchases during shipment $ 1,000
f. Sales clerk's monthly salary $ 2,500
Required:
Determine the cost of inventory (purchases) for Lite Foot Shoe Wholesalers for February. If a cost is not included in inventory, explain why it is not. (Show computation)