Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details.

Purchases $500,000

Beginning Merchandise Inventory 175,000

Purchase Returns and Allowances 60,000

Purchase Discounts 12,000

Freight In 17,000

Ending Merchandise Inventory 160,000

A. $477,000

B. $460,000

C. $780,000

D. $500,000

B. $460,000

Explanation:

The computation of the cost of goods sold using the periodic inventory system is shown below:

Beginning Inventory $175,000

Add: Purchases $500,000

Add: Freight In $17,000

Less: Purchase Returns and allowances - $60,000

Less: Purchase Discounts - $12,000

Cost of goods available for sale $620,000

Less: Ending Inventory - $160,000

Cost of goods sold $460,000

We simply applied the above format to determine the cost of goods sold