Question

Liberty is calculating her cost of goods sold to enter on her Schedule C. Her inventory at the beginning of the year amounted to $50,000. Her cost for labor and materials was $20,000. She had no other costs. Her inventory at the end of the year totaled $58,000. What amount for cost of goods sold will Liberty enter on her Schedule C

Answer 1

Answer:cost of goods sold for Liberty to enter on her Schedule C = $12,000

Step-by-step explanation:

Cost of goods sold (COGS) of a company are all the costs ie( the raw materials and labor ) involved directly in the production of the particular goods sold by the company.

Given

Beginning Inventory = $50,000

Purchases regarding Labour and materials= $20,000

Ending inventory = $58,000

Cost of Goods Sold is calculated as Beginning Inventory + Purchases During the Period – Ending Inventory

$50,000 + $20,000 - $58,000

$70,000 - $58,000

$12,000