Determine the missing amounts assuming that this company uses the periodic inven
ID: 2421614 • Letter: D
Question
Determine the missing amounts assuming that this company uses the periodic inventory system.
2014
2015
2016
Sales
$290,000
$ ?
$410,000
Sales returns & allowances
11,000
13,000
Net sales
?
347,000
Beginning inventory
20,000
32,000
Ending inventory
Purchases
?
260,000
298,000
Purchase returns & allowances
5,000
8,000
10,000
Freight-in
8,000
9,000
12,000
Cost of goods sold
233,000
293,000
Gross profit
46,000
91,000
97,000
2014
2015
2016
Sales
$290,000
$ ?
$410,000
Sales returns & allowances
11,000
13,000
Net sales
?
347,000
Beginning inventory
20,000
32,000
Ending inventory
Purchases
?
260,000
298,000
Purchase returns & allowances
5,000
8,000
10,000
Freight-in
8,000
9,000
12,000
Cost of goods sold
233,000
293,000
Gross profit
46,000
91,000
97,000
Explanation / Answer
YEAR 2014
Cost of Goods Sold = Beginning Inventory + Inventory Purchases – End Inventory
233,000 = 20,000 + (purchase-purchase return) - 32,000
Purchase - purchase return = 245,000
Purchase - 5,000 = 245,000
Purchase = 250,000
Net Sales = Sales - Sales Return & allowance
Net Sales = 290,000 - 11,000
Net Sales = 279,000
YEAR 2015
Net Sales = Sales Sales Return & Allowances
347,000 = Sales - 13,000
Sales = 360,000
Net Sales - COGS = Gross Profit
347,000 - COGS = 91,000
COGS = 256,000
COGS = Beginning Inventory + Inventory Purchases – End Inventory
256,000 = 32,000 +(260,000 - 8,000) - End Inventory
End Inventory = 28,000
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