Powell Corp.'s Inventory balance at the end of 2009 and 20102 was $500,000 and $540,000, respectively. During 2010, Powell's cost of goods sold was $2,000,000. How much inventory did Powell buy during 2010?

Question

Quizplus · Accepted Answer

To find the inventory purchased, use the formula: Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory. Rearranging gives Purchases = Ending Inventory - Beginning Inventory + Cost of Goods Sold. Substituting the given values: $540,000 - $500,000 + $2,000,000 = $2,040,000.