Question

The trial balance of Splish Brothers Inc. at the end of its fiscal year, August 31, 2022, includes these accounts: Beginning Inventory $21,510; Purchases $242,050; Sales Revenue $183,600; Freight-In $8,620; Sales Returns and Allowances $3,220; Freight-Out $3,510; and Purchase Returns and Allowances $6,550. The ending inventory is $24,800. Prepare a cost of goods sold section (periodic system) for the year ending August 31, 2022.

Answer 1

See below

Step-by-step explanation:

Computation of cost of goods sold section.

Beginning inventory August 1, 2022

$21,510

Add: Purchases

$242,050

Less: Purchase return and allowance

($6,550)

Net purchases

$235,500

Add: Freight in

$8,620

Cost of goods purchases

$244,120

Cost of goods available for sale

$265,630

Less: Ending inventory August 31, 2022

$25,800

Cost of goods sold

$240,800