Answer:
The missing part of the question is found below:
Cinnamon Buns Co. (CBC) started 2021 with $52,000 of merchandise on hand. During 2021, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.
Option A,$318,000 is correct
Explanation:
The points to note in answering this question are :
The opening inventory of $52,000 was overvalued as $10,000 out of it was held for third as consignment,hence it does belong to Cinnamon Buns Co(CBC).
Secondly,in calculating the costs of goods available the freight charges are disregarded since it assumed to have been paid by the supplier.
Lastly discounts are assumed not have been taken,as a result the purchase and returns should be stated at invoice prices.
Restated opening inventory=$52,000-$10,000=$42,000
Merchandise purchased is $280,000
merchandise returned is $4,000
Costs of goods available=opening inventory+purchases-returns
=$42,000+$280,000-$4000
=$318,000
