Question

Simpsons Company's accounting records show the following account balances: Beginning Inventory $ 50,000 Ending Inventory 20,000 Freight-In 14,500 Freight-Out 20,000 Purchases 244,000 Purchase Returns and Allowances 7,400 Purchase Discounts 8,000 The company uses the periodic inventory system. Based on the information above compute cost of goods sold.

Answer 1

Beginning inventory 50,000

Add: Purchases 244,000

294,000

Add: Freight-in 14,500

308,500

Less: Purchases return 7,400

301,100

Less: Ending inventory 20,000

Cost of goods sold 281,100

Step-by-step explanation:

Cost of goods sold is calculated beginning inventory plus purchases plus freight-in minus purchases return minus ending inventory.