Question

The trial balance of Tamarisk, Inc. at the end of its fiscal year, August 31, 2022, includes these accounts: Beginning Inventory $24,350; Purchases $203,160; Sales Revenue $182,200; Freight-In $9,080; Sales Returns and Allowances $4,880; Freight-Out $1,860; and Purchase Returns and Allowances $8,250. The ending inventory is $24,300.

Answer 1

Solution and Explanation:

Cost of goods sold section :

Beginning inventory, September 1, 2013   24350

Purchase  203160  

Less: Purchase return and allowance  -8250  

Net purchase  194910  

Add: Freight in  9080  

Cost of goods purchased   203990

Cost of goods available for sale   228340

Less: Inventory august 31,2014   -24300

Cost of goods sold   204040

Note: Net purchases are calculated after deducting purchase return and allowances from the purchase. For calculating the cost of goods purchased, freight in is to be added.