For (a) through (d), identify the items designated by X and Y.
a. Purchases 2 (X 1 Y) 5 Net purchases.
b. Net purchases 1 X 5 Cost of merchandise purchased.
c. Merchandise inventory (beginning) 1 Cost of merchandise purchased 5 X.
d. Merchandise available for sale 2 X 5 Cost of merchandise sold before estimated returns.
e. Cost of merchandise sold before estimated returns 2 X = Cost of merchandise sold.
Answer:
a. Purchases discounts, purchases returns and allowances
b. Freight in
c. Merchandise available for sale
d. Merchandise inventory (ending)
e. Increase in estimated returns inventory