Answer:
$2,200,000
Explanation:
The movements in the inventory account is as a result of purchases, sales and writeoffs if any. These are the events that bring about a change between the opening and closing balances.
Given;
cost of goods sold = $2,000,000
Increase in inventory = $200,000 (This is same as closing balance minus opening balance)
Ending balance = $400,000
Thus, opening balance = $400,000 - $200,000
= $200,000
Let the cost of merchandise that Dave's purchased during the year be N
$200,000 + N - $2,000,000 = $400,000
N = $400,000 + $2,000,000 - $200,000
N = $2,200,000
The cost of merchandise that Dave's purchased during the year is $2,200,000
