Question

Assume that Windsor, Inc. uses a periodic inventory system and has these account balances:

Purchases $383,500;
Purchase Returns and Allowances $12,100;
Purchase Discounts $6,400;
and Freight-in $17,100.

Determine net purchases and cost of goods purchased.

Answer 1

Net Purchase = $365,000

Cost Of Goods purchased = $382,100

Step-by-step explanation:

given data

Purchases = $383,500

Purchase Returns and Allowances = $12,100

Purchase Discounts = $6,400

Freight-in = $17,100

to find out

net purchases and cost of goods purchased

solution

we know that Net Purchase is express as

Net Purchase = Purchases - Purchase Discount - Purchase Return and Allowances .........................1

put here value in equation 1 we get

Net Purchase = $383,500 - $6,400 - $12,100

Net Purchase = $365,000

and

Cost Of Goods purchased = Net Purchase + Freight ....................2

so put here value

Cost Of Goods purchased = $365,000 + $17,100

Cost Of Goods purchased = $382,100