Question

A firm had merchandise inventory of $30,000 on January 1, 2019. During the year the firm had purchases of $54,000, freight in of $1,200, purchases returns and allowances of $2,700, and purchases discounts of $900. The firm had merchandise inventory of $27,000 on December 31, 2019.


What net delivered cost of purchases was reported for the year ended December 31, 2019, on the classified income statement?

What was the cost of goods sold?

Answer 1

Answer:

net delivered cost of purchases = $51600

Cost of goods sold = $54600

Explanation:

given data

inventory = $30,000

Purchases = $54000

Freight in = $1200

Purchase return and allowance = $2700

Purchase discount = $900

merchandise inventory = $27,000

to find out

net delivered cost of purchases and cost of goods sold

solution

we get here net delivered cost of purchases that is express as

net delivered cost of purchases = Purchases + Freight in - Purchase return and allowance - Purchase discount   ..................1

put here value

net delivered cost of purchases = $54000  + $1200 - $2700  - $900

net delivered cost of purchases = $51600

and

Cost of goods sold will be here as

Cost of goods sold = Beginning inventory + Purchase - Ending inventory    .............2

Cost of goods sold = $30000 + $51600 - $27000

Cost of goods sold = $54600