Do-It-Yourself Home Repair Shop started the accounting period with $10,000 worth of shovels in inventory.During the accounting period,it purchased $5,000 worth of shovels and sold $7,500 worth.In this scenario,what is the cost of goods sold?

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) is calculated by adding the beginning inventory to the purchases made during the period, then subtracting the ending inventory. In this case, beginning inventory ($10,000) + purchases ($5,000) = $15,000 total available for sale. Since $7,500 worth was sold, and assuming all sold items were from the current inventory without specifying ending inventory, the cost of goods sold is the amount sold, which is $7,500.

Do-It-Yourself Home Repair Shop Started the Accounting Period with $10,000