Question

During 2010, Shockglass Company recorded inventory purchases of $45,000 and cost of goods sold of $50,000. If inventory at the beginning of the year was $15,000, the ending inventory balance must have been:

A. $10,000.
B. $25,000.
C. $26,000.
D. $27,000.

Answer 1

Using the formula for calculating ending inventory balance, which is Beginning Inventory plus Purchases minus Cost of Goods Sold, the ending inventory for Shockglass Company in 2010 is found to be $10,000, which corresponds with option A.

Step-by-step explanation:

The question is about determining the ending inventory balance for Shockglass Company for the year 2010. To find this out, we can use the basic inventory formula which is:

Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold

Given that the beginning inventory was $15,000, inventory purchases were $45,000, and the cost of goods sold was $50,000, we can calculate the ending inventory:

Ending Inventory = $15,000 + $45,000 - $50,000

Ending Inventory = $60,000 - $50,000

Ending Inventory = $10,000

Therefore, the correct answer is A. $10,000.