Determining cost of goods sold: Periodic system (Appendix)
Lane Antiques uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Lane’s records: beginning balance in inventory, $24,000; purchases, $150,000; purchase returns and allowances, $10,000; sales, $400,000; sales returns and allowances, $2,500; freight-in, $750; and operating expenses, $26,000. A physical count indicated that $18,000 of merchandise was on hand at the end of the accounting period.
Required
a. Prepare a schedule of cost of goods sold.
b. Prepare a multistep income statement.
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