Problem

Determining cost of goods sold: Periodic system (Appendix)Sunset Retailers uses the period...

Determining cost of goods sold: Periodic system (Appendix)

Sunset Retailers uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Sunset’s records for the year 2012: begin­ning balance in inventory, $24,900; purchases, $306,400; purchase returns and allowances, $12,400; sales, $720,000; sales returns and allowances, $6,370; transportation-in, $1,820; and operating expenses, $51,400. A physical count indicated that $24,800 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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