Reference no: EM132786760

Glen company uses uses the perpetual Inventory system. The company entered into the following events:

1) Purchased merchandise inventory that cost $10,000 under terms of 2/10, n/30.

2) Made payment to the supplier within the discount period.

3) Sold all of the goods to customers on account for $22,000

Problem 1: What is Glen's cost of goods sold as a result of these three transactions?

A. $9,000

B. $9,800

C. $10,000

D. $21,800

Estimating Inventory;

Problem 2: Is there any situation that would make it permissible for a company to estimate ending inventory at the end of the fiscal year instead of taking a physical count? Should it be a concern for the outside auditors?