Question

Cable Knit, Inc. reported cost of goods sold of $3,800 for the current year. Its beginning inventory was $3,900 and its ending inventory was $1,400. What was the amount of purchases made during the year?

Answer 1

Answer:

Purchases made during the year is $1300.

Step-by-step explanation:

The beginning Inventory is reported to be $3900

The ending inventory is reported to be $1400

The cost of goods sold, (Sales) is reported to be $3800

We can relate the above mentioned items using the formula

Ending Inventory  = Beginning Inventory + Purchases - Sales

      $1400               = $3900 +  Purchases - $3800

Therefore the amount of purchase made during the year,

Purchases  = $1400  - $100

                   = $1300.