Chicago Steel's operating activities for the year are listed below. What is the cost of goods sold for the year?
A)$1,400,000
B)$750,000
C)$50,000
D)$1,750,000

Question

Chicago Steel's operating activities for the year are listed below.  What is the cost of goods sold for the year?
A)$1,400,000 
B)$750,000 
C)$50,000 
D)$1,750,000

Quizplus · Accepted Answer

The cost of goods sold is calculated as the beginning inventory plus purchases made during the year minus the ending inventory. From the given information, we have:
Beginning inventory = $500,000
Purchases = $1,600,000
Ending inventory = $700,000
So, cost of goods sold = $500,000 + $1,600,000 - $700,000 = $1,400,000. Therefore, the correct answer is A.

Chicago Steel's Operating Activities for the Year Are Listed Below