Assume that Pharoah Company uses a periodic inventory system and has these account balances: Purchases $351,600; Purchase Returns and Allowances $12,300; Purchase Discounts $6,300; and Freight-in $17,000. Determine net purchases and cost of goods purchased.

Question

Johan Pearson

Business

19 May, 11:34

Assume that Pharoah Company uses a periodic inventory system and has these account balances: Purchases $351,600; Purchase Returns and Allowances $12,300; Purchase Discounts $6,300; and Freight-in $17,000. Determine net purchases and cost of goods purchased.

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Answers (1)

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Valery Chang · Answer 1

Net purchase = $333,000

cost of goods purchased = $350,000

Explanation:

net purchases = purchases-returns-discounts

= 351,600 - 12,300 - 6,300

cost of goods purchased = net purchases + freight

= 333,000+17000

=$350,000