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.