At the end of last year, Games-2-Use had goods costing $140,000 in inventory. During January of the current year, the company purchased goods costing $102,000, and sold goods that it had purchased at a total cost of $84,000. Games-2-Use uses a perpetual inventory system.
-The balance in the Inventory account at 31 January was:

Question

Quizplus · Accepted Answer

The question does not provide any information to determine the cost of goods sold. However, we can use the given information to determine the value of inventory at the end of the period. The formula to calculate the value of ending inventory is:

Ending inventory = Beginning inventory + Purchases - Cost of goods sold

We know that the beginning inventory is $100,000 and purchases during the month were $242,000. Therefore, we can rearrange the formula to solve for the cost of goods sold:

Cost of goods sold = Beginning inventory + Purchases - Ending inventory
Cost of goods sold = $100,000 + $242,000 - $158,000
Cost of goods sold = $184,000

Therefore, the balance in the inventory account at 31 January was:

Ending inventory = Beginning inventory + Purchases - Cost of goods sold
Ending inventory = $100,000 + $242,000 - $184,000
Ending inventory = $158,000

Hence, the best choice would be C.

At the End of Last Year, Games-2-Use Had Goods Costing