Question

Farley Company had beginning inventory of $15k Mar 1, 2006. During the month, the company made purchases of $40k. The inventory at the end of the month is $17,300. What is cost of goods sold for the month of March?

Answer 1

Answer:

The cost of goods sold for the month of March is $37,700

Explanation:

Opening inventory : The inventory which is in the beginning year

Purchase : The inventory which is purchased during a year is recorded under purchase account of inventory

Closing inventory : It is ended inventory which is recorded at the end of the year in the books of accounts.

The computation of cost for goods sold for the month of march is shown below:

= Opening inventory + Purchase - closing Inventory

= $15,000 + $40,000 - $17,300

= $37,700

Hence, the cost of goods sold for the month of March is $37,700