Question

PART B: COMPREHENSIVE QUESTIONS: SHOW WORK FOR PARTIAL CREDIT (70%) 7. The following details are provided by Western Wear Merchandisers. The company uses the periodic inventory system. (20 Points) AED Net Sales Revenue 198,000 Purchases 94,000 Purchase Returns and Allowances 2,000 Purchase Discounts 1,500 Freight In 1,700 Beginning Merchandise Inventory 63,000 Ending Merchandise Inventory 37,000 Calculate the amount of net purchases. AED

Answer 1

Solution:

The amount of Net Purchases is calculated as follows :

= Purchases – Purchase Returns and Allowances – Purchase Discounts

As per the information given in the question

Purchases = AED 94,000 ;

Purchase Returns and Allowances = AED 2,000 ;

Purchase Discounts = AED 1,500

Applying the above information we have Net purchases as

= AED 94,000 – AED 2,000 – AED 1,500

= AED 90,500

Thus the amount of Net purchases = AED 90,500