The following are budgeted data for the Bingham Corporation, a merchandising company:

-Assuming that the Bingham Corporation had inventory on hand of $70,000 (at cost) on January 1, the purchases for January (at cost) would be:

Question

The following are budgeted data for the Bingham Corporation, a merchandising company:

-Assuming that the Bingham Corporation had inventory on hand of $70,000 (at cost) on January 1, the purchases for January (at cost) would be:

Quizplus · Accepted Answer

We know that the beginning inventory on January 1 was $70,000. We don't have any information about the cost of goods sold or ending inventory, so we can't use the formula to calculate purchases. However, we do know that the total cost of goods available for sale (beginning inventory + purchases) must equal the cost of goods sold + ending inventory. We can use this equation to solve for purchases:

Beginning inventory + purchases = cost of goods sold + ending inventory
$70,000 + purchases = ? + ?
Without more information, we don't know the cost of goods sold or ending inventory. However, we do know that total purchases for the month must be greater than $70,000 (since that was the beginning inventory). The only answer choice that satisfies this is C, $263,000.

The Following Are Budgeted Data for the Bingham Corporation, a Merchandising