Question

The following information applied to Concord Corporation for 2017:

Merchandise purchased for resale			$400000
Freight-in			7600
Freight-out			4500
Purchase returns			2300

Concord's 2017 inventoriable cost was

Answer 1

Concord's 2017 Inventoriable cost was:

Merchandise purchased for resale	$400000
Add: Freight-in	$7600
Total Purchases	$407600
Less: Purchase returns	($2300)
Total Inventoriable cost	$405300

Freight-out is expense of delivery. only those costs or expenses to be considered which contribute to preparing stock for trading or sale are inventoried. Freight-out is not considered and not inventoried as the items have reached for sale prior to incurring this expense.