Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method.What is the cost of goods available for sale?

Question

Eneri Company's inventory records show the following data:  A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method.What is the cost of goods available for sale?

Quizplus · Accepted Answer

The cost of goods available for sale can be calculated as beginning inventory + purchases. From the given data, beginning inventory is $120,000 and purchases are $86,000 (computed by subtracting $34,000 in cost of goods sold from $120,000 in sales). Thus, cost of goods available for sale is $206,000.

Eneri Company's Inventory Records Show the Following Data: a Physical