The company had purchased $58,000 of inventory from Zahn (a vendor) approximately 3yrs ago. As of today the balance of the remaining inventory was $18,674. This inventory is most likely obsolete and will not be used in the future.
Zahn has offered to take back the inventory for future credit. Zahn is willing to offer a buy one get one free deal based on the weight of the product returned.
Below are the relevant details. What is the value of the inventory purchased under the buy one get one free deal? What are the entries to record the obsolete & new inventory? For any data missing, make relevant assumptions.
Inventory on hand, including obsolete inventory -$76,852.00
Weight of inventory returned for buy one get one free deal -280g
Weight of inventory purchased under buy one get one free deal -500g (250g are free; 250g purchased)
Amount Paid for inventory purchased on buy one get one free deal -$19,681.00