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30 August, 14:26

A firm had merchandise inventory of $30,000 on January 1, 2019. During the year the firm had purchases of $54,000, freight in of $1,200, purchases returns and allowances of $2,700, and purchases discounts of $900. The firm had merchandise inventory of $27,000 on December 31, 2019.

What net delivered cost of purchases was reported for the year ended December 31, 2019, on the classified income statement?

What was the cost of goods sold?

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  1. 30 August, 14:49
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    net delivered cost of purchases = $51600

    Cost of goods sold = $54600

    Explanation:

    given data

    inventory = $30,000

    Purchases = $54000

    Freight in = $1200

    Purchase return and allowance = $2700

    Purchase discount = $900

    merchandise inventory = $27,000

    to find out

    net delivered cost of purchases and cost of goods sold

    solution

    we get here net delivered cost of purchases that is express as

    net delivered cost of purchases = Purchases + Freight in - Purchase return and allowance - Purchase discount ... 1

    put here value

    net delivered cost of purchases = $54000 + $1200 - $2700 - $900

    net delivered cost of purchases = $51600

    and

    Cost of goods sold will be here as

    Cost of goods sold = Beginning inventory + Purchase - Ending inventory ... 2

    Cost of goods sold = $30000 + $51600 - $27000

    Cost of goods sold = $54600
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