Question

Carr Corporation has provided the following information for its most recent month of operation: sales $8,200; beginning inventory $1,100; ending inventory $2,100 and gross profit $5,300. How much were Carr’s inventory purchases during the period?

Answer 1

Answer:

$3,900

Explanation:

The computation of the inventory purchase is shown below:

As we know that

Sales - gross profit = Cost of goods sold

$8,200 - $5,300 = Cost of goods sold

So, the cost of goods sold is $2,900

Now the cost of goods sold is

Cost of goods sold = Opening stock + purchase made - ending stock

$2,900 = $1,100 + purchase made - $2,100

$2,900 = -$1,000 + purchase made

So, the purchase made is

= $2,900 + $1,000

= $3,900