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The general ledger of Ace company shows the following data: invoice cost of purchase 188,000, purchase...

The general ledger of Ace company shows the following data: invoice cost of purchase 188,000, purchase discount received, 10,000, purchase returns and allowances, 4,000. Merchandise inventory beg, 18,000. Total cost of merchandise purchases, 182,800, merchandise inventory end, 10,800. The cost of goods sold is 190,000. How much is the freight in?

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Answer #1

Answer:

Freight in = $8,800

Working note:

Beginning merchandise inventory $18,000
Endind merchandise inventory $10,800
Cost of goods sold $190,000
Total cost of merchandise purchase $182,800

Cost of goods sold = Beginning merchandise inventory + Total cost of merchandise - Ending merchandise inventory

$190,000 = $18,000 + $182,800 - $10,800

The total cost of merchandise purchase = Invoice cost of purchases - purchase discount received - Purchase returns and allowances + Freight in.

$182,800 = $188,000 - $10,000 - $4,000 + Freight in

= $182,800 = $174,000 + Freight in

Freight in = $182,800 - $174,000 = $8,800

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