The following information is available for Bestway Company.What amount is paid for merchandise for the current year (2012) ?

Question

The following information is available for Bestway Company.What amount is paid for merchandise for the current year (2012)?

Quizplus · Accepted Answer

To find the amount paid for merchandise for the current year (2012), we need to look at the "Purchases" line in the Income Statement. 
Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory 
Using the information given in the question: 
Cost of Goods Sold = $840,000
Ending Inventory = $54,000
Beginning Inventory = $20,000
This gives us: 
Purchases = $840,000 + $54,000 - $20,000 = $874,000 
Therefore, the correct answer is B) $870,000.

The Following Information Is Available for Bestway Company