Calculation of Cost of Goods Sold: Periodic Inventory System with Sales Returns and Allowances The following amounts are known for Adams Gift Shop: Beginning merchandise inventory $27,000 Ending merchandise inventory 22,000 Purchases 78,000 Purchases returns and allowances 3,900 Purchases discounts 6,000 Freight-in 350   Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns inventory are shown. Beginning estimated returns inventory $2,000 Ending estimated returns inventory 1,600 Prepare the cost of goods sold section of the income statement

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Calculation of Cost of Goods Sold: Periodic Inventory System with Sales Returns and Allowances

The following amounts are known for Adams Gift Shop:

Beginning merchandise inventory $27,000
Ending merchandise inventory 22,000
Purchases 78,000
Purchases returns and allowances 3,900
Purchases discounts 6,000
Freight-in 350

 

Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns inventory are shown.

Beginning estimated returns inventory $2,000
Ending estimated returns inventory 1,600

Prepare the cost of goods sold section of the income statement.

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