The Following Is from Goldman Inc ? How Much Will Goldman Report as Cost of Goods

question 160

Multiple Choice

The following is from Goldman Inc.'s 2016 income statement. $$\begin{array} { l r } \text { Purchases } & \$ 172,000 \\\text { Transportation-In } & 11,000 \\\text { Inventory, January 1,2016 } & 26,500 \\\text { Inventory, December 31,2016 } & 28,800 \\\text { Purchase Returns and Allowances } & 8,400\end{array}$$ ? How much will Goldman report as cost of goods purchased in its 2016 income statement?

• A) $180,400
• B) $174,600
• C) $183,000
• D) None of these choices

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Definitions:

Income Summary Account

A temporary account used in closing process to transfer the balances of all revenue and expense accounts to Retained Earnings.

Income Summary

An account used in the closing process during the accounting cycle that summarizes revenues and expenses before transferring the net amount to retained earnings.

Net Income

The amount of money a company earns after deducting all its expenses, taxes, and costs from its total revenues, also known as net earnings or net profit.

Adjust Salaries

The process of modifying the amount of wages or salaries paid to employees, which may be done for reasons such as performance appraisals or inflation adjustments.