The Ocho Co.had a beginning inventory of $25,000 and an ending inventory of $40,000.Its Cost of Goods Sold for the year was $485,000.What was the amount of purchases that it made for the year?
A) $470,000
B) $500,000
C) $525,000
D) $530,000

Question

Quizplus · Accepted Answer

The formula to calculate purchases is: Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory. Substituting the given values: Purchases = $485,000 + $40,000 - $25,000 = $500,000.