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
