Question

Using the following data taken from Hsu's Imports Inc. which uses a periodic inventory system, prepare the cost of goods sold section of the income statement for the year ended March 31.

Inventory, April 1 $193,250
Inventory, March 31 180,100
Purchases 1,079,600
Purchases returns and allowances 51,200
Purchases discounts 18,500
Sales 1,860,000
Freight in 19,250

Answer 1

Step-by-step explanation:

Using the following data taken from Hsu's Imports Inc. which uses a periodic inventory system, prepare the cost of goods sold section of the income statement for the year ended March 31.

Inventory, April 1 $193,250

Inventory, March 31 180,100

Purchases 1,079,600

Purchases returns and allowances 51,200

Purchases discounts 18,500

Sales 1,860,000

Freight in 19,250

Answer 2

COGS= $1,042,300

Step-by-step explanation:

To calculate the cost of goods sold, we need to use the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

First, we need to calculate the cost of goods purchased:

cost of goods purchased= purchases - Purchases returns and allowances - Purchases discounts + Freight in

cost of goods purchased= 1,079,600 - 51,200 - 18,500 + 19,250

cost of goods purchased= 1,029,150

Now, the COGS:

COGS= 193,250 + 1,029,150 - 180,100

COGS= $1,042,300