Question

Beginning inventory Merchandise $323,000 Finished goods $646,000 Cost of purchases 560,000 Cost of goods manufactured 820,000 Ending inventory Merchandise 223,000 Finished goods 217,000 Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.

Answer 1

$660,000; $1,249,000

Step-by-step explanation:

Cost of goods sold (Merchandising Business):

= Beginning inventory + Cost of purchases - Ending inventory

= $323,000 + 560,000 - 223,000

= $660,000

Cost of goods sold (Manufacturing Business):

= Beginning inventory + Cost of goods manufactured - Ending inventory

= $646,000 + 820,000 - 217,000

= $1,249,000