Smithers Amusement Machines has cost of goods sold of $100,000 and ending inventory of $150,000. If Smithers had no purchases and no returns, what was the cost of its beginning inventory?

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) is calculated as Beginning Inventory + Purchases - Ending Inventory. Since there were no purchases or returns, the equation simplifies to Beginning Inventory - Ending Inventory = COGS. Therefore, Beginning Inventory = COGS + Ending Inventory = $100,000 + $150,000 = $250,000.

Smithers Amusement Machines Has Cost of Goods Sold of $100,000