A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $4,000; Transportation-In, $450; Purchases, $12,000; Purchases Returns and Allowances, $2,300; Purchases Discounts, $220. The cost of merchandise purchased is equal to

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To calculate the cost of merchandise purchased, we need to consider the purchases, transportation-in, and the net effect of purchases returns and allowances, and purchases discounts.

The formula to calculate the cost of merchandise purchased is:
Cost of Merchandise Purchased = Purchases + Transportation-In − Purchases Returns and Allowances − Purchases Discounts

Given the following account balances:
- Merchandise Inventory at the beginning of the year: $4,000
- Transportation-In: $450
- Purchases: $12,000
- Purchases Returns and Allowances: $2,300
- Purchases Discounts: $220

We can now plug in the values into the formula:

Cost of Merchandise Purchased = $12,000 + $450 − $2,300 − $220

We perform the calculations:

Cost of Merchandise Purchased = $12,450 − $2,520

Cost of Merchandise Purchased = $9,930

Therefore, the cost of merchandise purchased is $9,930.