Question

Travis Corporation begins the year with $50,000 of tire inventory. The company purchases tires worth $150,000 during the year. At the end of the year, the purchase cost of remaining inventory is $30,000. What is the cost of goods sold?

Answer 1

Answer:

$170,000

Explanation:

Given that,

Travis Corporation begins the year with $50,000 of tire inventory that means inventories in the beginning of the year.

Purchases of tires during the year = $150,000

At the end of the year,

Purchase cost of remaining inventory = $30,000

Therefore,

Cost of goods sold:

= Beginning inventories + Purchases - Ending inventories

= $50,000 + $150,000 - $30,000

= $200,000 - $30,000

= $170,000