Chapter 5, Problem 5.44EX

Appendix 2

Cost of goods sold

Identify the errors in the: following schedule of the cost of goods sold for the year ended May 31, 20Y5:

Cost of goods sold: Inventory, May 31, 20Y5		$ 105,000
Cost of merchandise purchased: Purchases Purchases returns and allowances Purchases discounts Freight in Total cost of merchandise purchased	$1,110,000 55,000 30,000 (22,000)	1,173,000
Inventory available for sale		$ 1,278,000
Inventory, June 1, 20Y4		(91.300)
Cost of goods sold before estimated returns		S 1,186,700
Estimated returns of this year’s sales		43,300
Cost of goods sold		$ 1,230,000