Question

namon Buns Co. (CBC) started 2021 with $53,600 of merchandise on hand. During 2021, $296,000 in merchandise was purchased on account with credit terms of 1/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,700. Merchandise with an invoice amount of $2,200 was returned for credit. Cost of goods sold for the year was $313,000. CBC uses a perpetual inventory system.

Assuming CBC uses the gross method to record purchases, ending inventory would be:

Answer 1

Beginning inventory	53,600
Inventory purchased	296,000
Freight	9,700
Merchandise returned	(2,200)
Discounts [($296,000 - 2200) x 1%)]	2,938
Cost of goods available for sale	360,038
Cost of goods sold	(313,000)
Ending inventory	47,038