Question

Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning) $ 16,000 $ 42,000 Inventory (ending) 10,000 52,000 Purchases 146,600 165,400 Purchase returns 7,000 52,000 Required: 1. Calculate cost of goods sold for each company.

Answer 1

Answer:

Lewis Incorporated Cost Of Goods Sold      $ 145,600

Clark Enterprises   Cost Of Goods Sold      $103,400

Explanation:

Lewis Incorporated

Inventory (beginning)                                $ 16,000

Add Purchases 146,600

Less Purchase returns 7,000

Net Purchases                                            139,600

Less Inventory (ending)                              ( 10,000 )

Cost Of Goods Sold                                  $ 145,600

Clark Enterprises

Inventory (beginning)                                  $ 42,000

Add Purchases  165,400

Less Purchase returns 52,000

Net Purchases                                                 113,400

Less Inventory (ending)                                    ( 52,000)

Cost Of Goods Sold                                         $103,400

The brackets indicate that the amount is deducted.

Answer 2

Answer:

Cost of Goods Sold - Lewis Incorporated                                     $  145,000  

Cost of Goods Sold - Clark Enterprises                                        $  103,400              

Explanation:

Computations for calculation of cost of goods sold

Cost of goods sold = Opening inventory + Purchases ( Net)- Closing Inventory

Lewis Incorporated

Opening Inventory                                                                            $  16,000

Add: Purchases                                    $ 146,000

Less: Purchase returns                        $     7,000

Net Purchases                                                                                   $ 139,000

Cost of good available for sale                                                        $ 155,000

Less: Ending Inventory                                                                     $ ( 10,000)

Cost of Goods Sold - Lewis Incorporated                                    $  145,000  

Clark Enterprises

Opening Inventory                                                                            $  42,000

Add: Purchases                                    $ 165,400

Less: Purchase returns                        $   52,000

Net Purchases                                                                                   $ 113,400

Cost of good available for sale                                                        $ 155,400

Less: Ending Inventory                                                                     $ ( 52,000)

Cost of Goods Sold - Clark Enterprises                                       $  103,400