Computing Cost of Goods Sold Using the following data, compute cost of goods sol

Question

Computing Cost of Goods Sold

Using the following data, compute cost of goods sold.

Inventory, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  45,000
Inventory, January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    60,000
Cash, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19,000
Purchases during the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    250,000
Sales during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    505,000

Explanation / Answer

cost of goods sold = purchases + beginning invenory - ending inventory
= 250,000 + 60,000 - 45,000 = 265,000

answer: 265,000

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