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21 October, 10:08

Arbor Corporation reports the following: Sales revenue $183,000; ending inventory $12,600; beginning inventory $15,600; purchases $64,000; purchases discounts $4,000; purchase returns and allowances $1,500; freight-in $1,000; freight-out $500. Calculate the company's cost of goods sold.

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  1. 21 October, 10:35
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    Answer: Cost of goods sold = $62500

    Explanation:

    Given that,

    Sales revenue = $183,000

    Ending inventory = $12,600

    Beginning inventory = $15,600

    purchases = $64,000

    purchases discounts = $4,000

    purchase returns and allowances = $1,500

    freight-in = $1,000

    freight-out = $500

    Cost of goods sold = Beginning inventory + purchases - purchases discounts - purchase returns and allowances + freight-in - Ending inventory

    = $15,600 + $64,000 - $4,000 - $1,500 + $1,000 - $12,600

    = $62500
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