Question

a company using the periodic inventory system has inventory costing $115 on hand at the beginning of a period. during the period, merchandise costing $543 is purchased. at year-end, inventory costing $374 is on hand. the cost of goods sold for the year is

Answer 1

According to the given statement The cost of merchandise sold for the year is $284.

What is periodic inventory system with example?

Examples of periodic systems include recording beginning inventory and treating all purchases as credits. Businesses instead do a physical count at the end and reconcile their accounts based on this rather than recording their unique sales during the period to debit.

What is periodic inventory control system?

Physical counts are used in periodic inventory systems to measure the inventory levels. After every sale or buy, the perpetual method updates inventory records continuously while keeping track of the inventory balance. Compared to larger merchants, small business owners with lower inventories gain more from periodic systems.

Briefing:

Cost of merchandise sold = Beginning finished goods inventory + Inventory purchased during the period - Ending finished goods inventory

Cost of merchandise sold = $115 + $543 - $374

Cost of merchandise sold = $284

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