Question

Wholesale Company began the year with merchandise inventory of $ 9 comma 000 . During the​ year, Upper Y purchased $ 90 comma 000 of goods and returned $ 6 comma 500 due to damage. Upper Y also paid freight charges of $ 1 comma 200 on inventory purchases. At​ year-end, Upper Y ​'s ending merchandise inventory balance stood at $ 17 comma 800 . Assume that Upper Y uses the periodic inventory system. Compute Upper Y ​'s cost of goods sold for the year.

Answer 1

Answer:

Cost of goods sold is $ 75.900

Explanation:

Cost of goods sold = Opening Inventory + Net Purchases - Closing Inventory

Opening Inventory                                                              $ 9,000

Purchases                                 $ 90,000

Less: Purchase returns            $( 6,500)

Add: Freight In                         $   1,200

Net purchases                                                                    $ 84,700

Cost of goods available for sale                                       $ 93,700

Less: Closing Inventory                                                     $ (17,800)

Cost of goods sold                                                            $ 75,900