Auto Parts, Inc. uses a periodic inventory system. Use the following details to calculate net purchases. $$\begin{array} { | l | r | }
\hline \text { Beginning merchandise inventory } & \$ 5,000 \
\hline \text { Ending merchandise inventory } & 2,500 \
\hline \text { Purchases } & 21,000 \
\hline \text { Purchase Discounts } & 900 \
\hline \text { Purchase Returns and Allowances } & 1,200 \
\hline \text { Freight In } & 4,300 \
\hline
\end{array}$$
A) $23,100
B) $18,900
C) $23,900
D) $20,100

Question

Auto Parts, Inc. uses a periodic inventory system. Use the following details to calculate net purchases. $$\begin{array} { | l | r | } 
\hline \text { Beginning merchandise inventory } & \$ 5,000 \
\hline \text { Ending merchandise inventory } & 2,500 \
\hline \text { Purchases } & 21,000 \
\hline \text { Purchase Discounts } & 900 \
\hline \text { Purchase Returns and Allowances } & 1,200 \
\hline \text { Freight In } & 4,300 \
\hline
\end{array}$$
A) $23,100
B) $18,900
C) $23,900
D) $20,100

Quizplus · Accepted Answer

Net purchases are calculated using the formula: purchases + freight-in - purchase returns and allowances - purchase discounts. 
From the given information:
Beginning inventory = $29,500
Purchases = $80,500
Purchase returns and allowances = $14,000
Purchase discounts = $2,700
Ending inventory = $34,400
Therefore, net purchases can be calculated as follows:
Net purchases = Purchases + Freight-in - Purchase returns and allowances - Purchase discounts
Net purchases = $80,500 + $1,500 - $14,000 - $2,700
Net purchases = $65,300
Thus, the correct answer is B.

Auto Parts, Inc A) $23,100 B) $18,900 C) $23,900 D) $20,100

Auto Parts, Inc A) $23,100
B) $18,900
C) $23,900
D) $20,100