Question

Assume that Sheridan Company uses a periodic inventory system and has these account balances: Purchases $392,500; Purchase Returns and Allowances $11,900; Purchase Discounts $6,200; and Freight-in $17,100. Determine net purchases and cost of goods purchased.

Answer 1

Answer:

net purchases = $374,400

cost of goods purchased = $391,500

Explanation:

net purchases = total purchases - purchase returns and allowances - purchase discounts = $392,500 - $11,900 - $6,200 = $374,400

cost of goods purchased = net purchases + freight in costs = $374,400 + $17,100 = $391,500