Stone Pine Corporation, a calendar year taxpayer, has ending inventory of $160,000 on December 31, 2014. During the year, the corporation purchased additional inventory of $375,000. If cost of goods sold for 2014 is $470,000, what was the beginning inventory at January 1, 2014?

Question

Stone Pine Corporation, a calendar year taxpayer, has ending inventory of $160,000 on December 31, 2014. During the year, the corporation purchased additional inventory of $375,000. If cost of goods sold for 2014 is $470,000, what was the beginning inventory at January 1, 2014? ​

Quizplus · Accepted Answer

Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory 
Let's plug in the given values: 
BI + $375,000 - $470,000 = $160,000 
BI - $95,000 = $160,000 
BI = $255,000

Therefore, the beginning inventory at January 1, 2014 was $255,000.

Stone Pine Corporation, a Calendar Year Taxpayer, Has Ending Inventory