To compute the cost of goods purchased and the cost of goods sold, we need to follow a systematic approach using the provided financial data. Here is how the calculations work step-by-step:
1. Calculate the Cost of Goods Purchased:
- Purchases: \[tex]$162,500
- Less: Purchase Discounts: \$[/tex]5,900
- Less: Purchase Returns and Allowances: \[tex]$3,600
- Add: Freight-In: \$[/tex]8,400
[tex]\[
\text{Cost of Goods Purchased} = (\text{Purchases}) - (\text{Purchase Discounts}) - (\text{Purchase Returns and Allowances}) + (\text{Freight-In})
\][/tex]
Plugging in the numbers, we get:
[tex]\[
\text{Cost of Goods Purchased} = 162,500 - 5,900 - 3,600 + 8,400 = 161,400
\][/tex]
2. Calculate the Cost of Goods Sold:
- Beginning Inventory: \[tex]$31,720
- Add: Cost of Goods Purchased: \$[/tex]161,400 (computed above)
- Less: Ending Inventory: \[tex]$27,950
\[
\text{Cost of Goods Sold} = (\text{Beginning Inventory}) + (\text{Cost of Goods Purchased}) - (\text{Ending Inventory})
\]
Plugging in the numbers, we get:
\[
\text{Cost of Goods Sold} = 31,720 + 161,400 - 27,950 = 165,170
\]
Therefore, the calculations yield the following results:
- Cost of Goods Purchased: $[/tex]161,400
- Cost of Goods Sold: $165,170
