Question

KLA Company provided the following data for 2018: sales, $800,000; beginning inventory, $40,000; ending inventory, $45,000; and gross profit, $150,000. What was the amount of inventory that KLA purchased during 2018

Answer 1

Answer:

$655,000= cost of goods purchased

Explanation:

Giving the following information:

sales, $800,000

beginning inventory, $40,000

ending inventory, $45,000

gross profit, $150,000

First, we need to calculate the cost of goods sold.

Gross profit= sales - cost of goods sold

Cost fo goods sold= sales - gross profit

COGS= $650,000

Now, we can determine the purchases using the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

650,000= 40,000 + cost of goods purchased - 45,000

655,000= cost of goods purchased