The following details are provided by Blue Bell Merchandisers. The company uses the periodic inventory system. Calculate the amount of net purchases.
A)$151,950
B)$87,360
C)$88,950
D)$106,000

Question

The following details are provided by Blue Bell Merchandisers. The company uses the periodic inventory system.  Calculate the amount of net purchases.
A)$151,950 
B)$87,360 
C)$88,950 
D)$106,000

Quizplus · Accepted Answer

The formula for calculating net purchases is: net purchases = purchases + freight-in - purchase returns and allowances. From the given information, we can calculate: purchases = $160,000, freight-in = $1,200, purchase returns = $2,250, and purchase allowances = $70. 
So, net purchases = $160,000 + $1,200 - $2,250 - $70 = $88,950. Therefore, the correct answer is Choice C.

The Following Details Are Provided by Blue Bell Merchandisers