Question

Cost of Merchandise Sold

Based on the following data, determine the cost of merchandise sold for November:

Increase in estimated returns inventory $14,500
Merchandise inventory, November 1 28,000
Merchandise inventory, November 30 31,500
Purchases 475,000
Purchases returns and allowances 15,000
Purchases discounts 9,000
Freight in 7,000

Calculate the cost of merchandise sold

Answer 1

$441,000

Step-by-step explanation:

The computation of the cost of merchandise sold is shown below:

Cost of merchandise sold = Opening inventory + net purchase - ending inventory

where,

Opening inventory = $14,500

Net purchase is

= $475,000 - $15,000 - $9,000 + $7,000

= $458,000

And, the ending inventory is $31,500

So, the cost of merchandise sold is

= $14,500 + $458,000 - $31,500

= $441,000