Question

Zippy Shoe Company uses a periodic inventory system. Zippy purchased 420 pairs of shoes at $74 each in June, 995 pairs in August at $76 each, and 640 pairs in December at $79 each. Zippy sold 1,880 pairs of shoes during the year. Calculate the cost of goods sold for the year using the periodic inventory system.

Answer 1

The cost of goods sold for Zippy Shoe Company is calculated by totaling the cost of all purchases throughout the year, which is $157,260, given there is no beginning or ending inventory.

Step-by-step explanation:

The cost of goods sold (COGS) for Zippy Shoe Company can be calculated by determining the total cost of purchases and subtracting the cost of the ending inventory (if any).

Here is the calculation for the COGS using the periodic inventory system:

• June Purchase: 420 pairs × $74 each = $31,080
• August Purchase: 995 pairs × $76 each = $75,620
• December Purchase: 640 pairs × $79 each = $50,560

Total Cost of Purchases = $31,080 + $75,620 + $50,560 = $157,260

Zippy sold 1,880 pairs during the year. Assuming there is no beginning inventory and no ending inventory, the entire cost of purchases would be the COGS.

Cost of Goods Sold = $157,260