Simpsons Company's accounting records show the following account balances: Beginning Inventory $ 50,000 Ending Inventory 20,000 Freight-In 14,500 Freight-Out 20,000 Purchases 244,000 Purchase Returns and Allowances 7,400 Purchase Discounts 8,000 The company uses the periodic inventory system. Based on the information above compute cost of goods sold.

Question

Ashley Hawkins

Business

4 April, 09:31

Simpsons Company's accounting records show the following account balances: Beginning Inventory $ 50,000 Ending Inventory 20,000 Freight-In 14,500 Freight-Out 20,000 Purchases 244,000 Purchase Returns and Allowances 7,400 Purchase Discounts 8,000 The company uses the periodic inventory system. Based on the information above compute cost of goods sold.

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Sarai Jenkins · Answer 1

Beginning inventory 50,000

Add: Purchases 244,000

294,000

Add: Freight-in 14,500

308,500

Less: Purchases return 7,400

301,100

Less: Ending inventory 20,000

Cost of goods sold 281,100

Explanation:

Cost of goods sold is calculated beginning inventory plus purchases plus freight-in minus purchases return minus ending inventory.