Final answer:
The correct total amount of purchases made by Marcel's Fashions in April is $12,500 after adjusting for freight, purchases returns and allowances, and purchases discounts. This amount is derived by applying the inventory accounting equation and making appropriate adjustments.
Step-by-step explanation:
The total amount of purchases made by Marcel's Fashions in the month of April can be calculated using the Cost of Goods Sold formula which is: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold. Given that the Cost of Goods Sold is $8,000, the Beginning Inventory is $7,000, and the Ending Inventory is $14,000, we can rearrange the formula to solve for Purchases.
Purchases + $7,000 - $14,000 = $8,000
Purchases - $7,000 = $8,000
Purchases = $8,000 + $7,000
Purchases = $15,000
However, this amount does not yet account for adjustments due to freight, purchase returns and allowances, and purchase discounts. So, we need to adjust the purchases amount by adding freight costs while subtracting purchase returns and purchase discounts.
Adjusted Purchases = Purchases + Freight - Purchases Returns and Allow - Purchases Discounts
Adjusted Purchases = $15,000 + $1,000 - $2,000 - $1,500
Adjusted Purchases = $15,000 + $1,000 - $3,500
Adjusted Purchases = $12,500
Therefore, the total amount of purchases made during the month is $12,500. So, none of the provided options (A. $16,500, B. $18,500, C. $17.500, D. $15.500) are correct.