Oaktree, Inc. is a merchandiser of inlaid wooden boxes. The company sold 7000 units during the year. The company has provided the following information: $$\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 550,000 \
\hline \text { Purchases (excluding freight in) } & 304,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 43,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the cost of goods sold for the year?

Question

Oaktree, Inc. is a merchandiser of inlaid wooden boxes. The company sold 7000 units during the year. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 550,000 \
\hline \text { Purchases (excluding freight in) } & 304,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 43,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the cost of goods sold for the year?

Quizplus · Accepted Answer

The cost of goods sold can be calculated as:
Beginning inventory + Cost of goods purchased - Ending inventory = Cost of goods sold
Using the provided information:
Beginning inventory = $38,000
Cost of goods purchased = $300,000
Ending inventory = $56,000
Cost of goods sold = $38,000 + $300,000 - $56,000 = $282,000
Therefore, the correct answer is B) $320,000, which is the closest choice to the calculated cost of goods sold.

Oaktree, Inc What Is the Cost of Goods Sold for the Year