At the beginning of September, 2010, GLF Company reported Merchandise Inventory of $4,000. During the month, the company made purchases of $7,800. At September 31, 2010, a physical count of inventory reported $3,200 on hand. Cost of goods sold for the month is
A) $600.
B) $7,800.
C) $8,600.
D) $11,800.

Question

Quizplus · Accepted Answer

To calculate the cost of goods sold, we need to first calculate the cost of goods available for sale:

Beginning Inventory + Purchases = Cost of Goods Available for Sale
$4,000 + $7,800 = $11,800

Next, we subtract the ending inventory from the cost of goods available for sale:

Cost of Goods Available for Sale - Ending Inventory = Cost of Goods Sold
$11,800 - $3,200 = $8,600

Therefore, the cost of goods sold for the month is $8,600. Choice C is the correct answer.

At the Beginning of September, 2010, GLF Company Reported Merchandise