Question

Cinnamon Buns Co. (CBC) started 2016 with $52,000 of merchandise on hand. During 2016, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system. Assuming CBC uses the gross method to record purchases, ending inventory would be: Group of answer choices

Answer 1

Ending inventory $15,480

Step-by-step explanation:

The computation of the ending inventory is shown below:

Beginning inventory $52,000

Add: Inventory purchased $280,000

Add: Freight $9,000

less: Merchandise returned -$4,000

Less: Discounts -$5,520 ($280,000 - $4,000) × 2%

Cost of goods available for sale $331,480

Less Cost of goods sold -$316,000

Ending inventory $15,480

The same would be considered and relevant