Question

Cost of Merchandise Sold Based on the following data, determine the cost of merchandise sold for July: Increase in estimated returns inventory $29,600 Merchandise inventory, July 1 49,300 Merchandise inventory, July 31 94,600 Purchases 985,500 Purchases returns and allowances 33,500 Purchases discounts 19,700 Freight in 13,800.

Answer 1

Answer:

$873,200

Explanation:

The computation of the cost of merchandise sold is shown below:

= Merchandise inventory, July 1  + Purchases - Purchases returns and allowances - Purchases discounts - Freight in - Merchandise inventory, July 31

= $49,300 + $985,500 - $33,500 - $19,700 - $13,800 - $94,600

= $873,200

We simply added the purchase amount and deduct all other items except Increase in estimated returns inventory to the opening balance of merchandise inventory