Ivanhoe Stores uses a periodic inventory system and reports the following information for 2021:

Beginning inventory

$44,000

Net sales

$537,000

Ending inventory

66,000

Purchase discounts

6,100

Freight in

12,000

Purchase returns and allowances

9,500

Freight out

10,500

Purchases

346,000

 

Prepare the cost of goods sold section of the multiple-step income statement for Ivanhoe Stores.

Beginning Inventory: $44,000

Add Net Purchases:

Purchases $346,000

Less:

Purchase Discount ($6,100)

Purchase Return and Allowances ($9,500)

Net Purchases $330,400

Less Ending Inventory: ($66,000)

Cost Of Good Sold $308,400

Step-by-step explanation

In Computing Cost of Good Sold using periodic Inventory System the Formula is as follows

Cost Of Good Sold= Beginning Inventory + Net Purchases - Ending Inventory

First Identify the Given accounts that will affect the cost of good sold

Beginning Inventory : $44,000

Ending Inventory : $66,000

Purchase Discount: $6,100

Purchase Return and Allowances : $9,500

Purchases : $346,000

Then Second Compute the Net Purchases

Net Purchases = Purchases - Purchase Discount- Purchase return and allowances

=$346,000 - $6,100 -$ 9,500

=$330,400

Last you will compute the Cost of Good Sold

Cost Of Good Sold= Beginning Inventory + Net Purchases - Ending Inventory

Please see the attached file for the complete solution