Question

Broad, Inc. had a beginning inventory of $50,000 and an ending inventory of $80,000. Its Cost of Goods Sold for the year was $970,000. What was the amount of purchases that it made for the year?
A. $940,000
B. $1,000,000
C. $1,050,000
D. $1,060,000

Answer 1

Answer:B. $1,000,000

Explanation :

Given that

beginning inventory = $50,000

Cost of Goods Sold =$970,000.

ending inventory = $80,000.

Using the formula below  to find the amount of purchases , we have that

Cost of Goods Sold  = Beginning Inventory + Purchases During the Period – Ending Inventory

$970,000 =$50,000+Purchases During the Period  -$80,000

Purchases During the Period =$970,000 -$50,000 +$80,000

Amount of Purchases During the Period for Broad, Inc.  = $ 1,000,000