Question

Paxson began 2014 with an inventory T-account debit balance of $22,000. In 2014, its inventory purchases amounted to $42,000, and it had no inventory-related write-downs or losses. What amount did Paxson record as cost of goods sold expense in 2014?

Answer 1

Answer:

$46,000

Explanation:

Note: The balance sheet is shown in the attachment. Kindly find it below:

The computation of the cost of goods sold expense is shown below:

Cost of goods sold = Opening inventory + Purchase - ending inventory

where,

Opening inventory = $22,000

Purchase = $42,000

And, the ending inventory is $18,000

So, the cost of goods sold is

= $22,000 + $42,000 - $18,000

= $46,000

Basically we applied the above formula to find out the  cost of goods sold expense in 2014