The following information is available for Quiny Inc. for 2020: $\begin{array}{llcc}
\text { Disbursements for purchases........................ } &\$715,000 \
\text {Increase in trade accounts payable................. } &63,800\
\text { Decrease in merchandise inventory.............. } &30,800\
\end{array}$
Cost of goods sold for 2020 was
A) $715,000.
B) $778,800.
C) $770,000.
D) $809,600.

Question

The following information is available for Quiny Inc. for 2020: $\begin{array}{llcc}
  \text { Disbursements for purchases........................ } &\$715,000  \
 \text {Increase in trade accounts payable.................  } &63,800\
 \text { Decrease in merchandise inventory.............. } &30,800\
\end{array}$
 Cost of goods sold for 2020 was
A) $715,000.
B) $778,800.
C) $770,000.
D) $809,600.

Quizplus · Accepted Answer

The cost of goods sold (COGS) can be calculated by adjusting the disbursements for purchases with the changes in trade accounts payable and merchandise inventory. The formula is: COGS = Disbursements for purchases + Increase in trade accounts payable - Decrease in merchandise inventory. Plugging in the numbers: COGS = $715,000 + $63,800 - $30,800 = $748,000. However, there seems to be a mistake in my calculation as none of the options match this result. Given the options, the correct approach to find COGS should involve correctly applying the changes in accounts payable and inventory to the disbursements for purchases. Let's correct the approach:Correct Calculation: COGS = Disbursements for purchases + Increase in trade accounts payable + Decrease in merchandise inventory = $715,000 + $63,800 + $30,800 = $809,600. This matches option D, indicating a mistake in my initial explanation.

The Following Information Is Available for Quiny Inc Cost of Goods Sold for 2020 Was A) $715,000

The Following Information Is Available for Quiny Inc Cost of Goods Sold for 2020 Was
A) $715,000