27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Cost of merchandise sold

Based on the following data, determine the cost of merchandise sold for November:

Increase in estimated returns inventory $14,500
Merchandise inventory, November 1 28,000
Merchandise inventory, November 30 31,500
Purchases 475,000
Purchases returns and allowances 15,000
Purchases discounts 9,000
Freight in 7,000

To determine

Cost of Goods Sold

Cost of goods sold indicates the costs involved for the inventory sold by the business in a specific period of time. Its mathematical representation is as below:

Cost of Goods Sold=Beginning Inventory+PurchasesEnding Inventory

To Calculate: The cost of merchandise sold.


Following table shows the calculation of cost of merchandise sold.

Calculation of Cost of Merchandise Sold
For The Month of November
Particulars Amount($) Amount($)
Merchandise inventory, November 1   28,000
Cost of merchandise purchased:    
   Purchases 475,000  
   Less: Purchase returns and allowances (15,000)  
   Less: Purchase discounts

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