Calculate the cost of sales for a retailer using the periodic inventory system from the following details.
$$\begin{array} { | l | l | }
\hline \text { Purchases } & \$ 520,000 \
\hline \text { Beginning inventory } & 180,000 \
\hline \text { Purchase returns and allowances } & 50,000 \
\hline \text { Purchase discounts } & 12,000 \
\hline \text { Freight in } & 18,000 \
\hline \text { Ending inventory } & 180,000 \
\hline
\end{array}$$
A) $520,000
B) $476,000
C) $836,000
D) $494,000

Question

Calculate the cost of sales for a retailer using the periodic inventory system from the following details.
$$\begin{array} { | l | l | } 
\hline \text { Purchases } & \$ 520,000 \
\hline \text { Beginning inventory } & 180,000 \
\hline \text { Purchase returns and allowances } & 50,000 \
\hline \text { Purchase discounts } & 12,000 \
\hline \text { Freight in } & 18,000 \
\hline \text { Ending inventory } & 180,000 \
\hline
\end{array}$$
A) $520,000
B) $476,000
C) $836,000
D) $494,000

Quizplus · Accepted Answer

To calculate the cost of sales using the periodic inventory system, we need to add the beginning inventory to the purchases during the period and subtract the ending inventory. However, the question does not provide any information about the beginning or ending inventory. Therefore, we cannot use the direct formula to calculate the cost of sales. 
Alternatively, we can use the cost of goods sold equation: 
Cost of goods sold = Beginning inventory + Purchases - Ending inventory
Since we do not have the beginning and ending inventory values, we can assume that the cost of goods sold is equal to the total purchases during the period. 
Therefore, the cost of sales for the retailer would be $476,000, which is option B.

Calculate the Cost of Sales for a Retailer Using the Periodic