Beginning inventory was $5,000.During the month,the company purchased an additional $25,000 of inventory and sold goods that cost $20,000.Ending inventory was:
A) $5,000
B) $50,000
C) $10,000
D) $0

Question

Quizplus · Accepted Answer

To calculate the ending inventory, we need to subtract the cost of goods sold (COGS) from the total cost of goods available for sale (beginning inventory + purchases).

COGS = $20,000 
Total cost of goods available for sale = $5,000 (beginning inventory) + $25,000 (purchases) = $30,000

Ending inventory = Total cost of goods available for sale - COGS 
Ending inventory = $30,000 - $20,000 
Ending inventory = $10,000

Therefore, the correct answer is C) $10,000.

Beginning Inventory Was $5,000