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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

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

Cost of merchandise sold

Based on the following data, determine the cast of merchandise sold for July:

Increase in estimated returns inventory $34,9000
Merchandise inventory, July 1 190,850
Merchandise inventory, July 31 160,450
Purchases 1,126,000
Purchases returns and allowances 46,000
Purchases discounts 23,000
Freight in 17,500

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 goods sold.

Explanation

Following table shows the calculation of cost of goods sold.

Calculation of Cost of Merchandise Sold
For The Month Ended July
Particulars Amount($) Amount($)
Merchandise inventory, July 1   190,850
Cost of merchandise purchased:    
   Purchases 1,126,000  
   Less: Purchase returns and allowances (46,000)  
   Less: Purchase discounts (23...

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