Question

Thompson company updates its inventory records perpetually. the company's records showed a beginning inventory of $600, cost of goods sold of $1,400, and ending inventory of $800. how much inventory was purchased during the year? $1,200 $1,000 $900

Answer 1

The total inventory can be calculated by adding the initial or beginning inventory which is equal to $600 and the cost of goods sold, $1,400. That is,
     
    T = $600 + $1,400 
    T = $2,000

Then, we subtract the ending inventory of $800 from the calculated value.

    S = $2,000 - $800
    S = $1,200

Hence, the answer to this item is the first choice.