Question

Dave's Duds reported cost of goods sold of $1,300,000 this year. The inventory account increased by $170,000 during the year to an ending balance of $495,000. What was the cost of merchandise that Dave's purchased during the year?
A. $3,445,000.B. $2,750,000.C. $2,355,000.D. $3,050,000.

Answer 1

Answer:

$1,470,000

Explanation:

As we know that

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

where,

Opening inventory would be

= $495,000 - $170,000

= $325,000

So, the purchase would be

$1,300,000 = $325,000 + Purchase - $495,000

$1,300,000 = -$170,000 + Purchase

So, the purchase would be

= $1,300,000 + $170,000

= $1,470,000

This is the answer but the same is not provided in the given options