Question

At the beginning of 2018, Calston Incorporated reports inventory of $10,000. During 2018, the company purchases additional inventory for $27,000. At the end of 2018, the cost of inventory remaining is $7,700.

Calculate cost of goods sold for 2018.

Answer 1

Answer: COGS for 2018 : 119,300

Step-by-step explanation:

Answer 2

COGS for 2018 : 119,300

Step-by-step explanation:

We use the inventory identity to solve for Cost of Goods Sold:

`$$Beginning Inventory + Purchase = Ending Inventory + COGS`

The right side are the input of inventory: it can be from previous prior and purchase from the period. And the left side are the destination, it can be on stock or sold.

We plug our values into the formula and solve for COGS

100,000 + 27,000 = 7,700 + COGS

COGS = 100,000 + 27,000 - 7,700 = 119,300