A Company Uses a Periodic Inventory System and Records Purchases

question 31

Multiple Choice

A company uses a periodic inventory system and records purchases using the net method.The following information applies to 2013,which was the first year of operations: $$\begin{array} { l r } \text { Purchases, at invoice price } & \$ 135,000 \\\hline \text { Purchases returns, at invoice price............ } & 9,000 \\\hline \text { Ending inventory physical count, at net... } & 39,750 \\\hline \text { Inventory shortage, at net. } & 1,800\end{array}$$ Purchase terms were: 3/10/60. All discounts were taken except for those on the first $22,500 shipped.Cost of goods sold for 2013 was:

• A)$86,250
• B)$84,450
• C)$82,470
• D)$80,670

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Definitions:

Soft Rationing

A situation where a company limits the amount of funding or capital it allocates to new or ongoing projects, often due to internal policy decisions.

Financial Stop-loss

A risk management strategy used to limit or reduce losses in various financial transactions, typically by setting a predetermined exit point for an investment.

Simulation

A method or process for imitating the operation of real-world systems or processes, using models for training, analysis, or prediction.

Scenario Analysis

An approach to study what might happen in the future by looking at various potential outcomes or situations.