Question

Cinnamon Buns Co. (CBC) started 2021 with $52,500 of merchandise on hand. During 2021, $284,000 in merchandise was purchased on account with credit terms of 2/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,800. Merchandise with an invoice amount of $3,000 was returned for credit. Cost of goods sold for the year was $302,000. CBC uses a perpetual inventory system. What is cost of goods available for sale, assuming CBC uses the gross method

Answer 1

Answer:

$337,680

Explanation:

Calculation to determine the cost of goods available for sale, assuming CBC uses the gross method

Beginning inventory $52,500

Inventory purchased $284,000

Freight $9,800

Merchandise returned ($3,000)

Discounts [($284,000 – $3,000) x 2%)] ($5,620)

Cost of goods available for sale $337,680

Therefore the cost of goods available for sale, assuming CBC uses the gross method is $337,680