Nieman Inc., a local retailer, has provided the following data for the month of March: The cost of goods sold for March was:
A)$146,000
B)$150,000
C)$142,000
D)$237,000

Question

Nieman Inc., a local retailer, has provided the following data for the month of March:  The cost of goods sold for March was:
A)$146,000 
B)$150,000 
C)$142,000 
D)$237,000

Quizplus · Accepted Answer

The cost of goods sold is calculated by subtracting the ending inventory from the beginning inventory, adding any purchases made during the month, and then subtracting the resulting number from the cost of goods available for sale. Using the given data:
Beginning Inventory = $170,000
Ending Inventory = $162,000
Purchases = $134,000
Cost of Goods Available for Sale = Beginning Inventory + Purchases = $170,000 + $134,000 = $304,000
Cost of Goods Sold = Cost of Goods Available for Sale - Ending Inventory = $304,000 - $162,000 = $142,000. Therefore, the best choice is C.