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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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