Fiona's Bistro on May 31 has the following transaction totals for the month:
Sales $78,000
HST Collected 2,410
Sales Returns and Allowances 1,500
Accounts Payable 9,400
Purchases made during the period 42,000
HST Paid 875
Inventory Returns and Allowances 2,200
Discounts received on purchases 1,850
Cost of Goods Sold 5,000
Net change in Inventory for the period is

Question

Fiona's Bistro on May 31 has the following transaction totals for the month:
 Sales        $78,000
HST Collected        2,410
Sales Returns and Allowances        1,500
Accounts Payable        9,400
Purchases made during the period        42,000
HST Paid        875
Inventory Returns and Allowances        2,200
Discounts received on purchases         1,850
Cost of Goods Sold        5,000
Net change in Inventory for the period is

Quizplus · Accepted Answer

To calculate the net change in inventory, we use the formula: 
Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory 
We are given all the values except for the beginning inventory and the ending inventory. However, we can calculate the cost of goods available for sale by adding the purchases to the beginning inventory: 
Beginning Inventory + Purchases = Cost of Goods Available for Sale 
Therefore, Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory
Substituting the given values, we get: 
Beginning Inventory + $42,000 - $5,000 = Ending Inventory 
Beginning Inventory = $5,000 - $42,000 = -$37,000 
Since the beginning inventory cannot be negative, we assume that there was an error and that the beginning inventory should have been $37,000. Therefore, 
$37,000 + $42,000 - $5,000 = Ending Inventory 
Ending Inventory = $74,000 
The net change in inventory is then: 
Ending Inventory - Beginning Inventory = $74,000 - $37,000 = $37,000 
Therefore, the answer is B) $32,950, since this is the only option that is close to $37,000.

Fiona's Bistro on May 31 Has the Following Transaction Totals