deezerdoo Posts: 34, Reputation: 2 Junior Member #1 Apr 23, 2007, 09:37 AM
Cost of Goods Sold
Purchases \$182,000
Transportation-In \$11,000
Inventory, January 1 \$26,500
Inventory, December 31 \$28,800
Purchase Returns and Allowances \$8,400

The amount reported as cost of goods sold on the income statement is?

I say 182,300
 Smith21000 Posts: 69, Reputation: 9 Junior Member #2 Apr 23, 2007, 01:50 PM
Correct!
 deezerdoo Posts: 34, Reputation: 2 Junior Member #3 Apr 24, 2007, 09:09 AM
I agree that I am correct the problem is my instructor has told me I am wrong and I can't figure out why the other choices I have for question are

\$190,700
\$186,900
\$179,900

Do you have any suggestions as to what I might be missing here is how I worked it out.

Iventory January 1 \$26,500
Purchases \$182,000
Less: Purchase Returns
And Allowances \$8,400
Net Purchases \$173,600
Cost of goods purchased \$184,600
Cost of goods available for sale \$211,100
Less: Inventory, December 31 \$28,800
Cost of Goods Sold \$182,300
 Smith21000 Posts: 69, Reputation: 9 Junior Member #4 Apr 24, 2007, 09:22 AM
Could you state the question exactley as it was given to you, maybe it's a terminology issue or missed type a number. Otherwise I still stand by COGS of \$182,300.
 deezerdoo Posts: 34, Reputation: 2 Junior Member #5 Apr 24, 2007, 09:25 AM
Use the following information for question 24.

Purchases \$182,000
Transportation-In \$11,000
Inventory, January 1 \$26,500
Inventory, December 31 \$28,800
Purchase Returns and Allowances \$8,400

24. The amount reported as cost of goods sold on the income statement is?
A. \$190,700 C. \$182,300
B. \$186,900 D. \$179,900
 Smith21000 Posts: 69, Reputation: 9 Junior Member #6 Apr 24, 2007, 10:33 AM
I stand by 182,300 as COGS. Please let me know what your instructor says is the right answer and ask him or her why.
 CaptainForest Posts: 3,645, Reputation: 393 Ultra Member #7 Apr 24, 2007, 09:02 PM
I'm with Smith on this. 182,300 is the correct answer.

I too am curious as to what your instructor says is the correct answer and why.
 deezerdoo Posts: 34, Reputation: 2 Junior Member #8 Apr 25, 2007, 05:45 AM
My instructor says the answer is \$190,700 I have e-mailed him and asked him to explain I should get a response back in the next day or so and will post what he says
 Superfly999 Posts: 235, Reputation: 14 Full Member #9 Apr 25, 2007, 07:18 AM
Apparently he didn't add the purchase return and allowance what so ever. Don't understand why he wouldn't though I'm curious also so I'll stick around to see why too :D
 deezerdoo Posts: 34, Reputation: 2 Junior Member #10 Apr 25, 2007, 08:01 AM
My Instructor wrote:

Answer was incorrectly posted when the grading key was input. I changed
Your original grade from an 88% to a 92%. Sorry for the
Error and the waste of your time.

Thank you so much for confirming my answer. I probably would not have had the confidence to challenge this without you guys confirming it for me. Thanks again this site has helped get a better understanding of accounting and has also given me confidence. I wonder how many other people have received a lower grade on this and did not know it. Thanks again.

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