Let's walk through the steps to calculate the Total Cost of Goods Sold using the provided information:
1. Calculate Net Purchases:
- Purchases: \[tex]$6,500
- Less: Purchase Discounts: \$[/tex]4,500
- Less: Purchase Returns and Allowances: \[tex]$68,000
Net Purchases is calculated by subtracting the purchase discounts and purchase returns and allowances from purchases:
\[
\text{Net Purchases} = 6,500 - 4,500 - 68,000 = -66,000
\]
2. Calculate Cost of Goods Purchased:
- Net Purchases: \(-\$[/tex]66,000\)
- Add: Freight-in: \[tex]$81,500
Cost of Goods Purchased is calculated by adding freight-in to net purchases:
\[
\text{Cost of Goods Purchased} = -66,000 + 81,500 = 15,500
\]
3. Calculate Goods Available for Sale:
- Beginning Inventory: \$[/tex]164,000
- Add: Cost of Goods Purchased: \[tex]$15,500
Goods Available for Sale is calculated by adding the beginning inventory to the cost of goods purchased:
\[
\text{Goods Available for Sale} = 164,000 + 15,500 = 179,500
\]
4. Calculate Total Cost of Goods Sold:
- Goods Available for Sale: \$[/tex]179,500
- Less: Ending Inventory: \[tex]$83,000
Total Cost of Goods Sold is calculated by subtracting the ending inventory from goods available for sale:
\[
\text{Total Cost of Goods Sold} = 179,500 - 83,000 = 96,500
\]
Therefore, the Total Cost of Goods Sold is $[/tex]\[tex]$96,500$[/tex]. The given choices for the answer do not include [tex]$\$[/tex]96,500$, suggesting an inconsistency in the provided table values that has resulted in erroneous calculations.
