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Prepare the cost of goods sold section for Adams Gift Shop. The following amounts are known:   Beginning merchandise inventory $27,000 Ending merchandise inventory 23,000 Purchases 75,000 Purchases returns and allowances 3,600 Purchases discounts 6,200 Freight-in 350   Assume the business makes estimates for sales returns and allowances at year end. The balance for estimated returns inventory are shown: Beginning estimated returns inventory 1,800 Ending estimated returns inventory 1,400

Prepare the cost of goods sold section for Adams Gift Shop. The following amounts are known:   Beginning merchandise inventory $27,000 Ending merchandise inventory 23,000 Purchases 75,000 Purchases returns and allowances 3,600 Purchases discounts 6,200 Freight-in 350   Assume the business makes estimates for sales returns and allowances at year end. The balance for estimated returns inventory are shown: Beginning estimated returns inventory 1,800 Ending estimated returns inventory 1,400

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare the cost of goods sold section for Adams Gift Shop. The following amounts are known:

 

Beginning merchandise inventory $27,000

Ending merchandise inventory 23,000

Purchases 75,000

Purchases returns and allowances 3,600

Purchases discounts 6,200

Freight-in 350

 

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

Beginning estimated returns inventory 1,800

Ending estimated returns inventory 1,400

**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**: $23,000 - **Purchases**: $75,000 - **Purchases Returns and Allowances**: $3,600 - **Purchases Discounts**: $6,200 - **Freight-in**: $350 Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns are: - **Beginning Estimated Returns Inventory**: $1,800 - **Ending Estimated Returns Inventory**: $1,400 **Task**: Prepare the cost of goods sold section of the income statement.
Transcribed Image Text:**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**: $23,000 - **Purchases**: $75,000 - **Purchases Returns and Allowances**: $3,600 - **Purchases Discounts**: $6,200 - **Freight-in**: $350 Assume the business makes estimates for sales returns and allowances at year-end. The balances for estimated returns are: - **Beginning Estimated Returns Inventory**: $1,800 - **Ending Estimated Returns Inventory**: $1,400 **Task**: Prepare the cost of goods sold section of the income statement.
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