Appendix EX 6-35 Cost of merchandise sold

Based on the following data, determine the cost of merchandise sold for July:


Merchandise inventory, July 1 $ 190,850
Merchandise inventory, July 31 160,450
Purchases 1,126,000
Purchases returns and allowances 46,000
Purchases discounts 23,000
Freight in 17,500





Answer:

Cost of merchandise sold:
Merchandise inventory, July 1 $ 190,850
Purchases $1,126,000
Less: Purchases returns and
allowances $46,000
Purchases discounts 23,000 69,000
Net purchases $1,057,000
Add freight in 17,500
Cost of merchandise purchased 1,074,500
Merchandise available for sale $1,265,350
Less merchandise inventory, July 31 160,450
Cost of merchandise sold $1,104,900