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19 January, 19:31

Simpsons Company's accounting records show the following account balances: Beginning Inventory $ 50,000 Ending Inventory 20,000 Freight-In 14,500 Freight-Out 20,000 Purchases 244,000 Purchase Returns and Allowances 7,400 Purchase Discounts 8,000 The company uses the periodic inventory system. Based on the information above compute cost of goods sold.

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  1. 19 January, 19:55
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    Beginning inventory 50,000

    Add: Purchases 244,000

    294,000

    Add: Freight-in 14,500

    308,500

    Less: Purchases return 7,400

    301,100

    Less: Ending inventory 20,000

    Cost of goods sold 281,100

    Explanation:

    Cost of goods sold is calculated beginning inventory plus purchases plus freight-in minus purchases return minus ending inventory.
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