Chapter 5, Problem 5.5DIE

(a)

To determine

Cost of goods purchased: It refers to the net purchases. It is arrived by deducting the purchase returns, allowances, and discounts from the actual purchase cost, and thereafter adding the freight-in charges.

To Compute: The cost of goods purchased for Corporation C.

(b)

To determine

Cost of goods sold: It indicates the costs involved for the inventory sold by the business, in a specific period of time. Its mathematical representation is as below:

$\boxed{\text{Cost of Goods Sold}=\left[\begin{array}{l}\left(\text{Beginning Inventory}+\text{Cost}\text{of Goods}\text{Purchased}\right)\\ –\text{Ending Inventory}\end{array}\right]}$

To Calculate: The cost of goods sold for Corporation C.