If a company has ending inventory of $25,000,purchases during the year of $95,000,and beginning inventory of $30,000,cost of goods sold equals $90,000.

Question

Quizplus · Accepted Answer

The equation used to calculate cost of goods sold is incorrect. The correct equation should be Beginning Inventory ($30,000)+ Purchases ($95,000)- Ending Inventory ($25,000)= Cost of Goods Sold ($100,000). Therefore, the cost of goods sold is actually $100,000, not $90,000.

If a Company Has Ending Inventory of $25,000,purchases During the Year