Question

Kuyu Company uses the periodic inventory system. Kuyu started the period with $12,000 in inventory. The Company purchased an additional $25,000 of merchandise, and returned $1,500 for a full credit. A physical count of inventory at the end of the period revealed that there was an ending inventory balance of $6,000. What was Kuyu’s cost of goods sold during the period?

Answer 1

Answer:

$29,500

Explanation:

Given that,

Beginning inventory = $12,000

Ending inventory = $6,000

Purchases = $25,000

Purchase return = $1,500

Kuyu’s cost of goods sold during the period:

= Beginning inventory + Net purchases - Ending inventory

= Beginning inventory + (Purchases - Purchase return) - Ending inventory

= $12,000 + ($25,000 - $1,500) - $6,000

= $12,000 + 23,500 - $6,000

= $29,500