Question

Cost of Merchandise Sold

Cost of merchandise sold:
Merchandise inventory, May 31, 2018			$105,000
Cost of merchandise purchased:
Purchases	$1,110,000
Purchases returns and allowances	55,000
Purchases discounts	30,000
Freight in	(22,000)
Total cost of merchandise purchased			1,173,000
Inventory available for sale			$1,278,000
Merchandise inventory, June 1, 2017			91,300
Cost of merchandise sold before estimated returns			$1,186,700
Increase in estimated returns inventory			43,300
Cost of merchandise sold			$1,230,000

The schedule of the cost of merchandise sold for the current year ended May 31, 2018 above contains errors. Prepare a corrected cost of merchandise sold section in the spaces provided below.

Answer 1

Cost of Particulars Merchandise inventorv, May 31, 2018 Cost ofmerchandise vurchased:- Merchandise Sold:- AmountS Amount $ 105,000 Purchases 1,110,000 (55,000) (30,000) 1,025,000 22,000 Less: Purchases returns and allowances Less: Purchases discounts Gross Purchases Add: Freight in Cost of merchandise purchased Merchandise vailable for sales Less: Merchandise inventory, June 1, 2017 Cost of merchandise sold before estimated returns Less: Increase in estimated returns inventory Cost of merchandise sold 1,047,000 1,152,000 (91,300) 1,060,700 (43,300) 1,017,400