A company provided the following data: sales,$500,000;beginning inventory,$40,000;ending inventory,$45,000;and gross profit,$150,000.What was the amount of inventory purchased during the year?
A)$385,000.
B)$355,000.
C)$345,000.
D)$145,000.

Question

Quizplus · Accepted Answer

To find the amount of inventory purchased during the year, we first calculate the cost of goods sold (COGS). COGS = Beginning Inventory + Purchases - Ending Inventory. We know the sales and gross profit, so we can find COGS by subtracting gross profit from sales: $500,000 - $150,000 = $350,000. Then, we solve for Purchases: $350,000 = $40,000 + Purchases - $45,000. Thus, Purchases = $350,000 - $40,000 + $45,000 = $355,000.

A Company Provided the Following Data: Sales,$500,000;beginning Inventory,$40,000;ending Inventory,$45,000;and Gross