Monte Vista uses the perpetual inventory system. At the beginning of the quarter, Monte Vista has $46,000 in inventory. During the quarter the company purchases $10,300 of new inventory from a vendor, returned $800 of inventory to the vendor, and took advantage of discounts from the vendor of $360. At the end of the quarter the balance in inventory is $34,500. What is the cost of goods sold?

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13 July, 15:19

Monte Vista uses the perpetual inventory system. At the beginning of the quarter, Monte Vista has $46,000 in inventory. During the quarter the company purchases $10,300 of new inventory from a vendor, returned $800 of inventory to the vendor, and took advantage of discounts from the vendor of $360. At the end of the quarter the balance in inventory is $34,500. What is the cost of goods sold?

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Orr · Answer 1

Net purchases = Gross purchases - Returned inventory - Discount on purchases

= $10,300 - $800 - $360 = $9,140

Ending inventory = Beginning inventory + Net purchases - Cost of goods sold

Cost of goods sold = Beginning inventory + Net purchases - Ending inventory

= $46,000 + $9,140 - $34,500 = $20,640