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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

CALCULATION OF COST OF GOODS SOLD: PERIODIC INVENTORY SYSTEM Prepare the cost of goods sold section for Havens Gift Shop. The following amounts are known:

Beginning merchandise inventory $29,000
Ending merchandise inventory 27,000
Purchases 62,000
Purchases returns and allowances 2,800
Purchases discounts 3,400
Freight-in 300

To determine

Prepare the cost of goods sold section for Company H.

Explanation

Periodic inventory system:

The method or system of recording the transactions related to inventory occasionally or periodically are referred to as periodic inventory system.

Cost of goods sold:

Cost of goods sold is the total of all the manufacturing expenses incurred by a company to sell the goods during the given period.

The beginning inventory is added to purchases for calculating cost of goods that is available for sale. The ending inventory is deducted from cost of goods that is available for sale to calculate cost of goods sold.

Prepare the cost of goods sold:

Cost of goods sold:AmountAmountAmountAmount
Merchandise inventory beginning$29,000
Purchas...

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