McLeod Corporation is a merchandising company.The year began with inventory of $27,000,Purchases for the year were $52,000,and the Ending Inventory was $14,000.What is the Cost of Goods Sold that would be reported on the income statement?
A) $93,000
B) $39,000
C) $11,000
D) $65,000

Question

Quizplus · Accepted Answer

To calculate the cost of goods sold (COGS), we need to subtract the Ending Inventory from the sum of Beginning Inventory and Purchases.

Beginning Inventory = $27,000
Purchases = $52,000
Ending Inventory = $14,000

COGS = Beginning Inventory + Purchases - Ending Inventory
COGS = $27,000 + $52,000 - $14,000
COGS = $65,000

Therefore, the correct answer is D) $65,000.

McLeod Corporation Is a Merchandising Company