Based on the following data, determine the cost of merchandise sold for July: Increase in estimated returns inventory $ 34,900

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

Increase in estimated returns inventory $      34,900

Merchandise inventory, July 1   190,850

Merchandise inventory, July 31 160,450

Purchases 1,126,000

Purchases returns and allowances 46,000

Purchases discounts 23,000

Freight in 17,500

Answer:

Cost of merchandise sold:

Merchandise inventory, July 1$ 190,850

Cost of merchandise purchased:

Purchases$1,126,000

Purchases returns and allowances (46,000)

Purchases discounts(23,000)

Net purchases$1,057,000

Freight in17,500

Total cost of merchandise purchased1,074,500

Merchandise inventory available for sale$1,265,350

Merchandise inventory, July 31(160,450)

Cost of merchandise sold before estimated returns $1,104,900

Increase in estimated returns inventory(34,900)

Cost of merchandise sold$1,070,000