Question

A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Transportation-In, $650; Purchases, $10,700; Purchase Returns and Allowances, $1,950; Purchase Discounts, $330. The cost of goods purchased is equal to a. $12,670. b. $17,230. c. $9,070. d. $8,420.

Answer 1

Answer:

c. $9,070

Explanation:

The computation of the cost of goods purchased is shown below:

= Purchase made + transport cost - purchase return & allowances - purchase return

= $10,700 + $650 - $1,950 - $330

= $9,070

We simply applied the above formula

The same is to be considered

hence, the cost of goods purchased is $9,070

Therefore the correct option is c. $9,070