Part 1:
We know that,
Cost of goods sold = Beginning inventory + Net purchases - Ending inventory
$620,040 = $165,900 + $652,300 - Ending inventory
Ending inventory = $165,900 + $652,300 - $620,040
= $198,160
Where,
Cost of goods sold = Net sales - Gross profit
= $1,033,400 - ($1,033,400 * 40%)
= $1,033,400 - $413,360
= $620,040
Net sales = $1,098,100 - $64,700
= $1,033,400
Net purchases = Gross purchases + Freighjt-in - Purcahse discount
= $633,400 + $30,300 - $11,400
= $652,300
Part 2:
Cost of goods sold = Beginning inventory + Net purchases - Ending inventory
$738,143 = $165,900 + $652,300 - Ending inventory
Ending inventory = $818,200 - $738,143
= $80,057
Where,
Cost of goods sold = Sales - gross profit
Cost of goods sold = Sales - 40% of cost of goods sold
140% of cost of goods sold = $1,033,400
Cost of goods sold = $1,033,400 / 140%
= $738,143 (Rounded-off)
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