The following details are provided by Blue Bell Merchandisers.The company uses the periodic inventory system. Calculate the amount of net purchases.

Question

The following details are provided by Blue Bell Merchandisers.The company uses the periodic inventory system.  Calculate the amount of net purchases.

Quizplus · Accepted Answer

To calculate net purchases, we need to subtract the cost of goods sold from the total cost of purchases. Since the periodic inventory system is used, the cost of goods sold can be calculated as follows:

Beginning inventory + Purchases - Ending inventory = Cost of Goods Sold

Here, we have not been given the beginning and ending inventory values. Therefore, we cannot calculate the cost of goods sold directly. However, we have been given the following information:

Total purchases = $94,600 
Purchase returns and allowances = $1,350 
Purchase discounts = $300 
Freight-in = $2,000

To calculate net purchases, we need to subtract the total amount of purchase returns and allowances, purchase discounts, and freight-in from the total purchases:

Net Purchases = Total Purchases - Purchase Returns and Allowances - Purchase Discounts - Freight-in 
= $94,600 - $1,350 - $300 - $2,000 
= $88,950

Therefore, the correct answer is C.

The Following Details Are Provided by Blue Bell Merchandisers