Question

Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details. Purchases$510,000 Beginning Merchandise Inventory180,000 Purchase Returns and Allowances50,000 Purchase Discounts14,000 Freight In15,000 Ending Merchandise Inventory180,000

Answer 1

COGS= $461,000

Step-by-step explanation:

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

cost of goods purchased= purchases - Returns and Allowances - Discounts + Freight In

cost of goods purchased= 510,000 - 50,000 - 14,000 + 15,000

cost of goods purchased=$461,000

Now, the cost of goods sold:

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

COGS= 180,000 + 461,000 - 180,000

COGS= $461,000