Damsel Inc.is a large manufacturer of auto tires.Damsel has provided the following information: Calculate the amount of ending finished goods inventory reported in Damsel's balance sheet.

Question

Damsel Inc.is a large manufacturer of auto tires.Damsel has provided the following information:  Calculate the amount of ending finished goods inventory reported in Damsel's balance sheet.

Quizplus · Accepted Answer

The ending finished goods inventory can be calculated by subtracting the cost of goods sold from the cost of goods manufactured, and adding the beginning finished goods inventory. 
Cost of goods manufactured= $400,000
Beginning finished goods inventory= $10,000
Cost of goods sold= $394,000
Ending finished goods inventory= Cost of goods manufactured - Cost of goods sold+ Beginning finished goods inventory = $400,000 - $394,000 + $10,000 = $16,000
Therefore, the correct answer is C)$4,000.