Cinnamon Buns Co

Multiple Choice

Cinnamon Buns Co. (CBC) started 2018 with $52,000 of merchandise on hand. During 2018, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.
- Assuming CBC uses the gross method to record purchases, ending inventory would be:

A) $6,480.
B) $15,400.
C) $15,480.
D) $21,000.