Page 132 - Demo

Ch(6): Income Statement for Merchandise Business1292-Identify the Net Purchases Formula3-Identify the Cost of Purchases Formula3-Cost of purchases =Net Purchases +Expenses on Purchases (Freight-In, Carriage-In, Transportation in, Import tax, Insurance on purchases)Cost of Purchases = 4,300 + 250 + 270= BD4,820 4-Identify the Cost of Goods Available for Sales Formula4-Cost of Goods Available for Sales = Opening Inventory + Cost of purchasesCost of Goods Available for Sales = 3,200 + 4,820= BD8,020 5-Identify the Cost of Goods Sold Formula5-Cost of Goods Sold = Cost of Goods Available for Sales -Ending InventoryCost of Goods Sold= 8,020 %u20131,600= BD6,420 2-Net Purchases = Gross Purchases (Purchases Discount + Purchases Returns and Allowance) Net Purchases = 5,600 (0 + 1,300)= 5,600 1,300= BD4,300.