Sampson Company's accounting records show the following at the year ending on December 31, 2014. $$\begin{array} { l r }
\text { Purchase Discounts } & \$ , 600 \
\text { Freight-In } & 7,800 \
\text { Purchases } & 350,010 \
\text { Beginning Inventory } & 23,500 \
\text { Ending Inventory } & 28,800 \
\text { Purchase Returns and Allowances } & 6,400
\end{array}$$ Using the periodic system, the cost of goods sold is
A) $351,110.
B) $348,910.
C) $340,510.
D) $359,510.

Question

Sampson Company's accounting records show the following at the year ending on December 31, 2014. $$\begin{array} { l r } 
\text { Purchase Discounts } & \$ , 600 \
\text { Freight-In } & 7,800 \
\text { Purchases } & 350,010 \
\text { Beginning Inventory } & 23,500 \
\text { Ending Inventory } & 28,800 \
\text { Purchase Returns and Allowances } & 6,400
\end{array}$$ Using the periodic system, the cost of goods sold is
A) $351,110.
B) $348,910.
C) $340,510.
D) $359,510.

Quizplus · Accepted Answer

The cost of goods sold (COGS) is calculated as: Beginning Inventory + Net Purchases - Ending Inventory. Net Purchases = Purchases + Freight-In - Purchase Returns and Allowances - Purchase Discounts. So, COGS = $23,500 + ($350,010 + $7,800 - $6,400 - $600) - $28,800 = $340,510.

Sampson Company's Accounting Records Show the Following at the Year