Question

For the current fiscal year, Purchases were $160,000, Purchase Returns and Allowances were $3,100 and Freight In was $10,000. If the beginning merchandise inventory was $115,000 and the ending merchandise inventory was $76,000, the Cost of Goods Sold is:

Multiple Choice

• $107,900

• $212,100

• $205,900

• $185,900

Answer 1

SOLUTION:
CALCILATION OF COST OF GOODS SOLD
PARTICULARS	AMOUNT	AMOUNT
Beginning Inventory		$                1,15,000
Add:- Net Purhcases
Purchases	$           1,60,000
Add: Freight In	$               10,000
Less: Purchase returns and allowances	$                 3,100
Net Purchases		$                1,66,900
Total Goods Available		$                2,81,900
Less: Ending Inventory		$                   76,000
Cost of Goods Sold		$                2,05,900
Answer = Option 3 = $ 205,900