Question

Elm Corporation is a merchandising company. The year began with inventory of $32,000, Purchases for the year were $57,000, and the Ending Inventory was $19,000. What is the Cost of Goods Sold that would be reported on the income statement?

Answer 1

Answer:

The cost of goods sold that would be reported on the incoem statement is $70000

Explanation:

The cost of goods sold is the value or cost of the inventory that a business sells to its customers. The cost of goods sold for the year can be calculated using the following formula.

Cost of Goods Sold (COGS) = Opening Inventory + Purchases for the year - Closing Inventory

Thus, Elm Corporation has a cost of goods sold to report on this year's income statement of:

COGS = 32000 + 57000 - 19000 = $70000