Question

Use the following to answer question 19:

Halberton Co. uses a periodic inventory system. At the end of 2006, Halberton had $55,000 left in inventory. A count of inventory at the end of 2007 showed $67,000. The following information has been provided by the purchasing department for 2007:            

16,000 units were purchased on Jan 15 for $25 each. Terms are 2/10, n/30

24,000 units were purchased on June 1 for $27 each.                                    

6,000 broken units from the June 1 purchase were returned to the manufacturer on June 15

32,000 units were purchased on Nov. 15 for $28 each. Terms are 3/10, n/30         

Shipping costs are $0.25 per item. The manufacturer reimburses Halberton Co. for ALL shipping costs associated with defective items. The department always takes advantage of purchase discounts.                            

19. What were Halberton's net purchases?

Answer 1

Solution:

Computation of Net Purchases
Date	Units purchased	Returns	Net quantity purchased	Unit Rate	Gross Purchases	Shipping cost	Discount	Net Purchases
15-Jan	16000	0	16000	$25.00	$400,000.00	$4,000.00	$8,000.00	$396,000.00
1-Jun	24000	6000	18000	$27.00	$486,000.00	$4,500.00	$0.00	$490,500.00
15-Nov	32000	0	32000	$28.00	$896,000.00	$8,000.00	$26,880.00	$877,120.00
Total								$1,763,620.00