Assume that Crane Company uses a periodic inventory system and has these account balances: Purchases $630,000; Purchase Returns and Allowances $25,700; Purchases Discounts $10,900; and Freight-In $18,300; beginning inventory of $45,000; ending inventory of $64,600, and net sales of $760,000. Determine the amounts to be reported for cost of goods sold and gross profit.

The amounts to be reported for cost of goods sold: $592,100

The amounts to be reported for gross profit: $167,900

Explanation:

Crane Company uses a periodic inventory system.

Net Purchases = Purchases - Purchase Returns and Allowances - Purchases Discounts + Freight-In = $630,000 - $25,700 - $10,900 + $18,300 = $611,700

Cost of goods sold = Beginning inventory + Net Purchases - Ending inventory = $45,000 + $611,700 - $64,600 = $592,100

Crane Company has net sales of $760,000.

Gross profit = Net sales - Cost of goods sold = $760,000 - $592,100 = $167,900

Cost of goods sold = $61,5300

Gross Profit = $144,700

Explanation:

Given the information:

Purchase : $630,000 Purchase Returns and Allowances $25,700 Prchases Discounts $10,900 Freight-In $18,300 beginning inventory of $45,000 ending inventory of $64,600 net sales of $760,000

As we the, the fomular for total Goods Available for Sale

= Beginning Inventory + Purchases + Freight-In - Purchase Returns and Allowances - Purchases Discounts

= $45,000 + $630,000 + $18,300 - $25,700 - $10,900

= $67,9900

=> Cost of goods sold = Total Goods Available for Sale - ending inventory

= $67,9900 - $64,600

= $61,5300

=> Gross Profit = Net sales - Cost of goods sold

= $760,000 - $61,5300

= $144,700

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