Question

The trial balance of Sheridan Company at the end of its fiscal year, August 31, 2017, includes these accounts:

Beginning Inventory $23,570;

Purchases $224,020;

Sales Revenue $185,200;

Freight-In $9,770;

Sales Returns and Allowances $4,400;

Freight-Out $2,330;

Purchase Returns and Allowances $5,460.

The ending inventory is $22,700.


Prepare a cost of goods sold section (periodic system) for the year ending August 31, 2017.

Answer 1

The answer is $229,200

Step-by-step explanation:

Cost of sales equals:

Beginning inventory plus purchases minus ending inventory.

Beginning inventory is $23,570

Purchases(net Purchase) is

Purchases $224,020

Add: Freight-In. $9,770

Minus: Purchase Returns. and Allowances. ($5,460)

Net Purchase:. $228,330

ending inventory is $22,700.

Therefore, cost of goods sold is:

$23,570 + $228,330 - $22,700

=$229,200