Question

On december 31, 2017, haas engineering's ending inventory was $41,200. on december 31, 2018, haas' ending inventory was $40,000. assuming beginning inventory and cost of goods purchased were the same in both 2017 and 2018, how will haas' cost of goods sold in 2018 differ from its cost of goods sold in 2017?

Answer 1

This is what I got based on my understanding of the problem:

2017 2018
Beg. Invty 41200 41200
add: purchases 0 0
less: end. Invty 41200 40000
Cost of goods sold 0 1200

Since the ending inventory of the previous year becomes the beginning inventory of current year and the problem stated that the beginning inventory of both years are the same, I put 41,200 in beg. invty 2017 and 2018.
Since there is no figure for cost of goods purchased but the problem said they are of the same value in both year, I used 0.

The difference in the cost of goods sold in 2018 from 2017 is that it is greater by 1,200