The following details are provided by Western Wear Merchandisers. The company uses the periodic inventory system. $$\begin{array} { | l | r | }
\hline \text { Net Sales Revenue } & \$ 198,000 \
\hline \text { Purchases } & 94,000 \
\hline \text { Purchase Returns and Allowances } & 2,000 \
\hline \text { Purchase Discounts } & 1,500 \
\hline \text { Freight In } & 1,700 \
\hline \text { Beginning Merchandise Inventory } & 63,000 \
\hline \text { Ending Merchandise Inventory } & 37,000 \
\hline
\end{array}$$ Calculate the amount of net purchases.

Question

The following details are provided by Western Wear Merchandisers. The company uses the periodic inventory system. $$\begin{array} { | l | r | } 
\hline \text { Net Sales Revenue } & \$ 198,000 \
\hline \text { Purchases } & 94,000 \
\hline \text { Purchase Returns and Allowances } & 2,000 \
\hline \text { Purchase Discounts } & 1,500 \
\hline \text { Freight In } & 1,700 \
\hline \text { Beginning Merchandise Inventory } & 63,000 \
\hline \text { Ending Merchandise Inventory } & 37,000 \
\hline
\end{array}$$ Calculate the amount of net purchases.

Quizplus · Accepted Answer

Net purchases can be calculated using the formula:
Net Purchases = Purchases - Purchase Returns and Allowances - Purchase Discounts
From the given information, we can calculate:
Purchases = Beginning Inventory + Cost of Goods Sold - Ending Inventory
Purchases = $200,000 + $745,000 - $250,000
Purchases = $695,000

Purchase Returns and Allowances = $5,000
Purchase Discounts = $10,000

Net Purchases = Purchases - Purchase Returns and Allowances - Purchase Discounts
Net Purchases = $695,000 - $5,000 - $10,000
Net Purchases = $680,000
Therefore, the correct choice is C, $90,500.

The Following Details Are Provided by Western Wear Merchandisers Calculate the Amount of Net Purchases