Question

Assume that Swann Company uses a periodic inventory system and has these account balances: Purchases $630,000; Purchase Returns and Allowances $25,000; Purchase Discounts $11,000; and Freight-In $19,000; beginning inventory of $45,000; ending inventory of $55,000; and net sales of $750,000. Determine the cost of goods sold

Answer 1

Answer:

Cost of goods sold = $513,000

Explanation:

Cost of goods sold = Opening inventory + Net purchases - Closing inventory

Opening inventory = $45,000

Closing inventory = $55,000

Net purchases = Purchase - Purchase return - discounts + freights in

Net purchase = $630,000 - $25,000 - $11,000 + $19,000

Net purchases = $613,000

Cost of goods sold = $45,000 + $613,000 - $55,000

Cost of goods sold = $513,000