PDA

View Full Version : Cost of Goods Sold


deezerdoo
Apr 23, 2007, 09:37 AM
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
Apr 23, 2007, 01:50 PM
Correct!

deezerdoo
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
Add: Transportation-In $11,000
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
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
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
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
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
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
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
Apr 25, 2007, 08:01 AM
My Instructor wrote:

In response to your email, your answer is correct. The wrong
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.