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18 April, 00:02

Assume that Oriole Company uses a periodic inventory system and has these account balances: Purchases $355,300; Purchase Returns and Allowances $10,200; Purchase Discounts $9,000; and Freight-in $16,800. Determine net purchases and cost of goods purchased.

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  1. 18 April, 03:46
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    The answer is:

    Net purchases = $336,100

    Cost of goods purchased = $352,900

    Explanation:

    Net purchases equals purchases minus purchase returns and allowances minus purchase discount.

    Purchases = $355,300

    Purchase returns = $10,200

    Purchase discount = $9,000

    Therefore, net purchase is:

    $355,300 - $10,200 - $9,000

    = $336,100

    Cost of goods purchased equals net purchase plus freight in.

    Freight in = $16,800

    So cost of goods purchased is:

    $336,100 + $16,800

    =$352,900
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