Question

The following information for the year Year 1 is taken from the accounts of Tuttle Company. The company uses the periodic inventory method.

Inventory, December 31, Year 1	$	9,200
Purchases		41,200
Purchase returns and allowances		720
Purchase discounts		520
Freight on goods purchased under terms FOB shipping point		1,720
Freight on goods sold under terms FOB destination		920
Cost of goods sold		29,600

Based on this information, the inventory at December 31, Year 2 is

Multiple Choice:

$21,280.

$12,320.

$28,680.

$19,160

Answer 1

The inventory at December 31, Year 2 is $21280

Working :

Inventory, December 31, Year 1		$     9,200.00
Add: Purchases	$    41,200.00
Less: Purchase returns and allowances	$        (720.00)
Less: Purchase Discounts	$        (520.00)
Net Purchases		$   39,960.00
Add: Freight on goods purchased		$     1,720.00
Cost of Goods Available for sale		$   50,880.00
Less: Cost of goods sold		$ (29,600.00)
Inventory, December 31, Year 2		$   21,280.00