Question

Assume that Windsor, Inc. uses a periodic inventory system and has these account balances:

Answer 1

Answer:

Net Purchase = $365,000

Cost Of Goods purchased = $382,100

Explanation:

given data

Purchases =  $383,500

Purchase Returns and Allowances =  $12,100

Purchase Discounts = $6,400

Freight-in = $17,100

to find out

net purchases and cost of goods purchased

solution

we know that Net Purchase is express as

Net Purchase = Purchases - Purchase Discount - Purchase Return and Allowances     .........................1

put here value in equation 1 we get

Net Purchase = $383,500 - $6,400 - $12,100

Net Purchase = $365,000

and

Cost Of Goods purchased = Net Purchase + Freight         ....................2

so put here value

Cost Of Goods purchased = $365,000 + $17,100

Cost Of Goods purchased = $382,100