Jackie's Online Service started with $7,000 in Inventory and had the following transaction totals for the month:
Sales $20,000
Sales Returns and Allowances 2,000
Cost of Goods Sold 8,000
Purchases 14,000
Freight 1,000
Purchases Returns and Allow. 2,000
Purchases Discounts 1,400
Ending Inventory for the period is
A) $10,600.
B) $9,600.
C) $12,600.
D) $14,000.

Question

Jackie's Online Service started with $7,000 in Inventory and had the following transaction totals for the month: 
Sales $20,000
Sales Returns and Allowances 2,000
Cost of Goods Sold 8,000
Purchases 14,000
Freight 1,000
Purchases Returns and Allow. 2,000
Purchases Discounts 1,400
Ending Inventory for the period is
A) $10,600.
B) $9,600.
C) $12,600.
D) $14,000.

Quizplus · Accepted Answer

The ending inventory is calculated as: Beginning Inventory + Purchases + Freight - Purchases Returns and Allowances - Purchases Discounts - Cost of Goods Sold = $7,000 + $14,000 + $1,000 - $2,000 - $1,400 - $8,000 = $10,600.

Jackie's Online Service Started with $7,000 in Inventory and Had