Dave's Duds reported cost of goods sold of $2,000,000 this year. The inventory account increased by $200,000 during the year to an ending balance of $400,000. What was the cost of merchandise that Dave purchased during the year?

Question

Quizplus · Accepted Answer

The cost of merchandise purchased during the year can be calculated using the formula:
Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory
Plugging in the values: 
$200,000 + Purchases - $2,000,000 = $400,000
Purchases = $2,200,000

Dave's Duds Reported Cost of Goods Sold of $2,000,000 This