Deana, Inc. Deana, Inc. purchased merchandise for $500,000, received credit for purchase returns of $25,000, took purchase discounts of $10,000, and paid transportation in of $20,000.
Refer to Deana, Inc. If Deana, Inc. had $20,000 in beginning inventory, and sold goods costing $300,000, what is the ending inventory balance?

Question

Quizplus · Accepted Answer

The cost of goods available for sale is calculated as: Beginning Inventory ($20,000) + Net Purchases ($500,000 - $25,000 - $10,000 + $20,000) = $505,000. Subtracting the cost of goods sold ($300,000) from the cost of goods available for sale ($525,000) gives an ending inventory of $185,000.