Question

Based on the following data, determine the cost of merchandise sold for November: Increase in estimated returns inventory$14,500 Merchandise inventory, November 128,000 Merchandise inventory, November 3031,500 Purchases475,000 Purchases returns and allowances15,000 Purchases discounts9,000 Freight in7,000

Answer 1

$454,500

Step-by-step explanation:

Cost of merchandise sold is the cost of the unit sold which is incurred to produce that merchandise. According to Matching concept the only the cost of the products which are sold should be charged against the revenue from that units. The cost of the inventory in hand should be deducted from the total value of inventory available for sale.

As per given data

Merchandise inventory, November 1 $28,000

Add: Purchases $475,000

Less: Purchases returns and allowances $15,000

Less: Purchases discounts $9,000

Add: Freight in $7,000

Less: Merchandise inventory, November 30 $31,500

Cost of Goods Sold $454,500