Answer :
Let's walk through the steps to calculate the Total Cost of Goods Sold using the provided information:
1. Calculate Net Purchases:
- Purchases: \[tex]$6,500 - Less: Purchase Discounts: \$[/tex]4,500
- Less: Purchase Returns and Allowances: \[tex]$68,000 Net Purchases is calculated by subtracting the purchase discounts and purchase returns and allowances from purchases: \[ \text{Net Purchases} = 6,500 - 4,500 - 68,000 = -66,000 \] 2. Calculate Cost of Goods Purchased: - Net Purchases: \(-\$[/tex]66,000\)
- Add: Freight-in: \[tex]$81,500 Cost of Goods Purchased is calculated by adding freight-in to net purchases: \[ \text{Cost of Goods Purchased} = -66,000 + 81,500 = 15,500 \] 3. Calculate Goods Available for Sale: - Beginning Inventory: \$[/tex]164,000
- Add: Cost of Goods Purchased: \[tex]$15,500 Goods Available for Sale is calculated by adding the beginning inventory to the cost of goods purchased: \[ \text{Goods Available for Sale} = 164,000 + 15,500 = 179,500 \] 4. Calculate Total Cost of Goods Sold: - Goods Available for Sale: \$[/tex]179,500
- Less: Ending Inventory: \[tex]$83,000 Total Cost of Goods Sold is calculated by subtracting the ending inventory from goods available for sale: \[ \text{Total Cost of Goods Sold} = 179,500 - 83,000 = 96,500 \] Therefore, the Total Cost of Goods Sold is $[/tex]\[tex]$96,500$[/tex]. The given choices for the answer do not include [tex]$\$[/tex]96,500$, suggesting an inconsistency in the provided table values that has resulted in erroneous calculations.
1. Calculate Net Purchases:
- Purchases: \[tex]$6,500 - Less: Purchase Discounts: \$[/tex]4,500
- Less: Purchase Returns and Allowances: \[tex]$68,000 Net Purchases is calculated by subtracting the purchase discounts and purchase returns and allowances from purchases: \[ \text{Net Purchases} = 6,500 - 4,500 - 68,000 = -66,000 \] 2. Calculate Cost of Goods Purchased: - Net Purchases: \(-\$[/tex]66,000\)
- Add: Freight-in: \[tex]$81,500 Cost of Goods Purchased is calculated by adding freight-in to net purchases: \[ \text{Cost of Goods Purchased} = -66,000 + 81,500 = 15,500 \] 3. Calculate Goods Available for Sale: - Beginning Inventory: \$[/tex]164,000
- Add: Cost of Goods Purchased: \[tex]$15,500 Goods Available for Sale is calculated by adding the beginning inventory to the cost of goods purchased: \[ \text{Goods Available for Sale} = 164,000 + 15,500 = 179,500 \] 4. Calculate Total Cost of Goods Sold: - Goods Available for Sale: \$[/tex]179,500
- Less: Ending Inventory: \[tex]$83,000 Total Cost of Goods Sold is calculated by subtracting the ending inventory from goods available for sale: \[ \text{Total Cost of Goods Sold} = 179,500 - 83,000 = 96,500 \] Therefore, the Total Cost of Goods Sold is $[/tex]\[tex]$96,500$[/tex]. The given choices for the answer do not include [tex]$\$[/tex]96,500$, suggesting an inconsistency in the provided table values that has resulted in erroneous calculations.