Calculate the cost of goods sold for a merchandiser using the periodic inventory system from the following details. Purchases $500,000
Beginning Merchandise Inventory 175,000
Purchase Returns and Allowances 60,000
Purchase Discounts 12,000
Freight In 17,000
Ending Merchandise Inventory 160,000
A. $477,000
B. $460,000
C. $780,000
D. $500,000

B. $460,000

Explanation:

The computation of the cost of goods sold using the periodic inventory system  is shown  below:

Beginning Inventory$175,000    

Add:  Purchases        $500,000    

Add: Freight In         $17,000    

Less: Purchase Returns and allowances-$60,000    

Less:  Purchase Discounts-$12,000    

Cost of goods available for sale$620,000    

Less: Ending Inventory-$160,000    

Cost of goods sold$460,000

We simply applied the above format to determine the cost of goods sold