Question

Purchases of merchandise inventory for the period was $500,000. In addition, the company had the following costs: Cost of Goods Sold $700,000 Purchase Returns and Allowances $50,000 Selling Expenses $75,000 Purchase Discounts $10,000 Freight In $40,000 Freight Out $30,000 What was the net cost of Purchases? ANSWER Unselected $405,000 Unselected $400,000 Unselected $480,000 Unselected $470,000

Answer 1

The net cost of purchases is $410,000.

Step-by-step explanation:

The net cost of purchases can be calculated by subtracting the purchase returns and allowances, purchase discounts, and freight out from the total purchases. In this case, the net cost of purchases would be calculated as follows:

Total Purchases - Purchase Returns and Allowances - Purchase Discounts - Freight Out

$500,000 - $50,000 - $10,000 - $30,000 = $410,000