Question

Marigold Lake Corporation’s accounting records show the following at year-end December 31, 2017:

Purchase Discounts

$5,960
Beginning Inventory

$33,550
Freight-In

8,710
Ending Inventory

28,600
Freight-Out

10,940
Purchase Returns and Allowances

3,810
Purchases

163,210


Assuming that Marigold Lake Corporation uses the periodic system, compute cost of goods purchased and cost of goods sold.

Cost of goods purchased ______________________

Cost of goods sold ___________________________

Answer 1

Cost of Goods Purchased;

= Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-In

= 163,210 - 3,810 - 5,960 + 8,710

= $162,510

Cost of Goods Sold

= Beginning Inventory + Cost of Goods Purchased - Ending Inventory

= 33,550 + 162,510 - 28,600

= $167,100