Question

ook Calculator ost of goods sold ased on the following data: Estimated returns of November sales Inventory, November 1 Inventory, November 30 $14,100 29,130 34,260 Purchases Purchases returns and allowances Purchases discounts Freight in 514,750 14,520 8,280 6,460 Determine the cost of goods sold for November. Cost of goods sold: Chady Workomore Check My Work uses remaining

Answer 1

Solution:

The cost of goods sold shall be calculated with the below formula

Opening Inventory + Purchases - Closing Inventory

Note 1: While calculating the purchases, any purchase returns and purchase discounts should be deducted from the purchase value and Freight inward should be added to purchase value which results in Net Purchases.

Note 2: While calculating the closing inventory, if there are any estimated sales returns the inventory value of sales returns should be added to closing inventory.

Calculation of Cost of Goods Sold for Novemb Opening Inventory (A) 29,130.00 Purchases Less: Purchase Returns Less: Purchase Discounts Add: Freight In Net Purchases (B) $ $ $ 514,750.00 (14,520.00) (8,280.00) 6,460.00 498,410.00 $ $ 498,410.00 Closing Inventory Add: Estimated returns Net Closing Inventory (C) $ 34,260.00 14,100.00 48,360.00 $ 48,360.00 Cost of Goods Sold = (A) + (B) - (C) 479,180.00