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The following amounts are known: Beginning merchandise inventory $27,000 Ending merchandise inventory 28,000 Purchases 59,000 Purchases returns and allowances 2,500 Purchases discounts 3,100 Freight-in 290   Assume the business makes estimates for sales returns and allowances at year end. The balances for estimated returns inventory are provided below. Beginning estimated returns inventory $2,300 Ending estimated returns inventory 3,200   Required:   Prepare the cost of goods sold section of the income statement for Havens Gift Shop

The following amounts are known: Beginning merchandise inventory $27,000 Ending merchandise inventory 28,000 Purchases 59,000 Purchases returns and allowances 2,500 Purchases discounts 3,100 Freight-in 290   Assume the business makes estimates for sales returns and allowances at year end. The balances for estimated returns inventory are provided below. Beginning estimated returns inventory $2,300 Ending estimated returns inventory 3,200   Required:   Prepare the cost of goods sold section of the income statement for Havens Gift Shop

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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Question
The following amounts are known:
Beginning merchandise inventory $27,000
Ending merchandise inventory 28,000
Purchases 59,000
Purchases returns and allowances 2,500
Purchases discounts 3,100
Freight-in 290
 
Assume the business makes estimates for sales returns and allowances at year end. The balances for estimated returns inventory are provided below.
Beginning estimated returns inventory $2,300
Ending estimated returns inventory 3,200
 
Required:
 

Prepare the cost of goods sold section of the income statement for Havens Gift Shop.

 

Amount Descriptions

 
Cost of goods purchased  
Cost of goods sold  
Goods available for sale  
Estimated returns inventory, December 31  
Estimated returns inventory, January 1  
Freight-in  
Merchandise inventory, December 31  
Merchandise inventory, January 1  
Net purchases  
Purchases  
Purchases discounts  

Purchases returns & allowances

 

Havens Gift Shop.
Income Statement (Partial)
For the year ended December 31, 20--

 

Income Statement

1
Cost of goods sold:
 
 
 
 
2
 
 
 
 
 
3
 
 
 
 
 
4
 
 
 
 
 
5
 
 
 
 
 
6
 
 
 
 
 
7
 
 
 
 
 
8
 
 
 
 
 
9
 
 
 
 
 
10
 
 
 
 
 
11
 
 
 
 
 
12
 
 
 
 
 
13
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