Question

Assume that Pharoah Company uses a periodic inventory system and has these account balances: Purchases $351,600; Purchase Returns and Allowances $12,300; Purchase Discounts $6,300; and Freight-in $17,000. Determine net purchases and cost of goods purchased.

Answer 1

Net purchase = $333,000

cost of goods purchased =$350,000

Step-by-step explanation:

net purchases = purchases-returns-discounts

= 351,600 -12,300 - 6,300

cost of goods purchased = net purchases + freight

= 333,000+17000

=$350,000