Consider the following facts: - Company A\'s accounting records at the end of th

Question

Consider the following facts:

- Company A's accounting records at the end of the year shows the following:

Purchase Discounts           $5,600

Freight In                        $7,800

Purchases                        $201,000

Beginning Inventory          $23,500

Ending Inventory              $28,800

Purchase Returns              $6,400

- Company A uses the periodic inventory system.

Company A's cost of goods purchased is:

a. $196,800

b. $191,500

c. $202,100

d. None of these answers are correct

e. $189,000

Explanation / Answer

Cost of goods purchased = Purchases - Purchases Return - Discount + Freight in

= 201000-6400-5600+7800

= 196800

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