Lewis Incorporated and Clark Enterprises report the following amounts for the year. LewisClark Inventory (beginning)$ 23,000 $ 49,000 Inventory (ending)17,000 59,000 Purchases246,000 225,600 Purchase returns14,000 59,000 Required: Calculate cost of goods sold for each company.

Cost of goods sold   Lewis: $ 238,000  Clark: $ 107,600

Explanation:

Lewis Incorporated and Clark Enterprises

                                              Lewis              Clark

Inventory (beginning)       $ 23,000             $ 49,000

Purchases                         246,000               225,600

Purchase returns               (14,000)               (59,000)

Add Net Purchases            232,000            166,600

Less Inventory (ending)        17,000                59,000

Cost of goods sold         238,000               107,600

Net purchases are calculated by deducting purchases returns from purchases. Net purchases are added to the beginning inventories and ending inventories are deducted from it to get the cost of goods sold.

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