Sampson Company\'s accounting records show the following at the year ending on D
ID: 2480661 • Letter: S
Question
Sampson Company's accounting records show the following at the year ending on December 31, 2015.
Purchase Discounts
$ 5,600
Freight-in
7,800
Purchases
200,010
Beginning Inventory
23,500
Ending Inventory
28,800
Purchase Returns
6,400
Using the periodic system, the cost of goods sold is
Select one:
a. $201,110
b. $190,510
c. $209,510
d. $198,910
e. none of the above
Purchase Discounts
$ 5,600
Freight-in
7,800
Purchases
200,010
Beginning Inventory
23,500
Ending Inventory
28,800
Purchase Returns
6,400
Explanation / Answer
Correct Answer is b.....$190,510
Calculation of Cost of Goods Sold:
Notes:
1) Freight in----is freight charges paid in connection with purchase of material. so it is included in cost of material purchase and be a part of COGS.
2) Purchase Return - It is the cost of material return to vendor for any reason. It is deducted from Purchases and be a part of COGS
3) Purchase Discount -- It is the amount of discount on purchass received from vendor.. Since it is directly related with the purchase..it is a part of cost of material purchase and be a part of COGS...
Particulars Amount Beginning Inventory $23,500 Add: Purchases $200,010 Less: Purchase Discount ($5,600) Add: Freigh- In $7,800 Less: Purchase Return ($6,400) Less: Ending Inventory ($28,800) Cost of Goods Sold $190,510Related Questions
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