Using the information below in the computation of cost of goods sold, what would be the appropriate amount of Purchases? Purchase returns $ 1,200
Inventory, December 31 2,500
Cost of goods sold 10,500
Purchases ?
Inventory, January 1 2,500
Freight-in 1,500
A) $10,800
B) $11,200
C) $ 9,700
D) $10,200

Question

Quizplus · Accepted Answer

To find Purchases, use the formula: Cost of Goods Sold = Beginning Inventory + Purchases + Freight-in - Ending Inventory - Purchase Returns. Plugging in the values: $10,500 = $2,500 + Purchases + $1,500 - $2,500 - $1,200. Solving for Purchases gives $10,200.

Using the Information Below in the Computation of Cost of Goods