Answer
a. Cost of Goods Purchased = 520,000 + 20,000 - 22,000 - 18,000
Cost of Goods Purchased = 500,000
b. Cost of Goods Sold = 90,000 + 500,000 - 104,000
Cost of Goods Sold = 486,000
Work Step by Step
Given
Purchases = 520,000
Merchandise Freight-in = 20,000
Purchase Returns and Allowances = 22,000
Purchase Discounts = 18,000
Beginning Merchandise Inventory (Jan. 1, 2014) = 90,000
Ending Merchandise Inventory (Dec. 31, 2014) = 104,000
a. Cost of Goods Purchased = Purchases + Merchandise Freight-in - Purchase Returns and Allowances - Purchase Discounts.
b.Cost of Goods Purchased = Purchases + Merchandise Freight-in - Purchase Returns and Allowances - Purchase Discounts
