Question

10. Given the following information, prepare in good form thecost of goods sold section of an income statement for 20×5.

Freight-In

$ 4,000

Merchandise Inventory, December 31, 20×4

15,000

Merchandise Inventory, December 31, 20×5

16,000

Purchases

38,000

Purchases Returns and Allowances

1,800

ANS:

Merchandise Inventory, December 31, 20×4

 

$

 

Purchases

$

 

 

Less Purchases Returns and Allowances

 

 

 

Net purchases

$

 

 

Freight-in

 

 

 

Net cost of purchases

 

 

 

Cost of goods available for sale

 

$

 

Less Merchandise Inventory, December 31, 20×5

 

 

 

Cost of Goods Sold

 

 

$

 

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