The following information appears on the income statement of the Davis Company at the end of the year.
$\begin{array}{lr}
\text { Sales } & \$ 512,000 \
\text { Cost of Goods Manufactured } & 357,000 \
\text { Gross Profit on Sales } & 168,000 \
\text { Beginning finished goods inventory } & 118,000
\end{array}$
Ending finished goods inventory is:

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) can be calculated as: Cost of Goods Manufactured + Beginning Finished Goods Inventory - Ending Finished Goods Inventory = Sales - Gross Profit. Rearranging to solve for Ending Finished Goods Inventory gives: Ending Finished Goods Inventory = Cost of Goods Manufactured + Beginning Finished Goods Inventory - (Sales - Gross Profit). Plugging in the numbers: 357,000 + 118,000 - (512,000 - 168,000) = 131,000.

The Following Information Appears on the Income Statement of the Davis