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question cinnamon buns co cbc started 2011 with 52 000 ofmerchandise on hand during 4286537

 

Question

Cinnamon Buns Co. (CBC) started 2011 with $52,000 ofmerchandise on hand. During 2011, $280,000 in merchandise waspurchased on account with credit terms of 2/10 n/30. All discountswere taken. Purchases were all made f.o.b. shipping point. CBC paidfreight charges of $9,000. Merchandise with an invoice amount of$4,000 was returned for credit. Cost of goods sold for the year was$316,000. CBC uses a perpetual inventory system.

Assuming CBC uses the gross method to record purchases, endinginventory would be

A. $15,400.

B. $6,480.

C. $21,000.

D. $15,480.

 

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