Question

Calculation of Cost of Goods Sold: Periodic Inventory System Prepare the cost of goods sold section for Adams Gift Shop. The following amounts are known: Beginning merchandise inventory $27,050 Ending merchandise inventory 22,550 Purchases 77,125 Purchases returns and allowances 4,055 Purchases discounts 5,745 Freight-in 230 Adams Gift Shop Cost of Goods Sold Cost of goods sold: $ $ $ $ $ Cost of goods sold $

Answer 1

• All working forms part of the answer
• Calculation of Cost of Goods Sold

Beginning Inventory		$           27,050.00
Purchases	$            77,125.00
Less: Purchase Returns & Allowances	$              4,055.00
Less: Purchase Discounts	$              5,745.00
Net Purchases	$            67,325.00
Add: Freight In	$                  230.00
Total Cost of Purchase		$           67,555.00
Cost of Goods Available for sale		$           94,605.00
Less: Ending Inventory		$           22,550.00
Cost of Goods Sold		$           72,055.00