Approach: Use the computation models in Illustration 5-1 and the data that flows through the Inventory account. Fill in the information given. Solve for the unknown.
TIP: Sales allowances have no impact on the balance of the Inventory account or the cost of goods sold computation.
TIP: Net sales is irrelevant information for the question at hand.
TIP: The beginning and ending inventory amounts have no effect on the computation of the cost of goods purchased. Freight-out is a selling expense and, therefore, does not affect the computation of the cost of goods purchased.