A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of a period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

Question

Quizplus · Accepted Answer

To calculate the cost of merchandise sold, we need to add the beginning inventory to the purchases made during the period and then subtract the ending inventory.

Beginning inventory = $210
Purchases = $635
Ending inventory = $160

Cost of merchandise sold = Beginning inventory + Purchases - Ending inventory
Cost of merchandise sold = $210 + $635 - $160
Cost of merchandise sold = $685

Therefore, the answer is B.

A Company Using the Periodic Inventory System Has Merchandise Inventory