The following information is available concerning the accounts of Fischer Company: Assuming the company records purchases at the gross amounts, the total purchases for 2011 would be
A)$62,000.
B)$63,400.
C)$58,100.
D)$57,800.

Question

The following information is available concerning the accounts of Fischer Company:  Assuming the company records purchases at the gross amounts, the total purchases for 2011 would be
A)$62,000. 
B)$63,400. 
C)$58,100. 
D)$57,800.

Quizplus · Accepted Answer

From the given information, we can see that the Purchases account has a beginning balance of $5,300 and an ending balance of $6,000. We also know that the company had a purchase returns and allowances of $600 and a purchase discount of $300. 
Using the formula: 
Total Purchases = Beginning balance + Purchases during the period - Purchase returns and allowances - Purchase discounts + Ending balance 
Total Purchases = $5,300 + x - $600 - $300 = $6,000 
Simplifying, 
x = $6,000 + $600 + $300 - $5,300 
x = $1,600 
Therefore, the total purchases for 2011 would be $1,600, which is option B.

The Following Information Is Available Concerning the Accounts of Fischer