Question

A company has beginning inventory for the year of $12,000. During the year, the company purchases inventory for $150,000 and ends the year with $20,000 of inventory. The company will report cost of goods sold equal to:

Answer 1

Answer:

The cost of Goods Sold is $142,000

Explanation:

The equation for determining the ending inventory is:

Opening Inventory + Purchases - Closing Inventory = Cost of Goods sold

By solving the equation with the available data;

$12,000 + $150,000 - $20,000  = $142,000

so the cost of goods sold as calculated is $ 142,000.