What is the cost of goods available for sale

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Question: Northwest Fur Co. started 2016 with $100,000 of merchandise inventory on hand. During 2016, $400,000 in merchandise was purchased on account with credit terms of 3/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $9,100. Merchandise with an invoice amount of $3,100 was returned for credit. Cost of goods sold for the year was $374,000. Northwest uses a perpetual inventory system.

Assuming Northwest uses the gross method to record purchases, what is the cost of goods available for sale?

$494,093.

$506,000.

$502,900.

$494,000.

Reference no: EM131740894

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