Question

Lux had net purchases of $70,000, ending inventory of $45,000, net sales of $100,000, and gross profit of $35,000. How much was Lux's beginning inventory? Hint: Sales-Gross Profit = C of GS and Beg Inv + Purchases - C of GS = End Inv

$10,000

Answer 1

The beginning inventory for Lux was $10,000.

Step-by-step explanation:

The formula to find the beginning inventory is:

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

Given that the net purchases were $70,000 and the ending inventory was $45,000, we can substitute the values into the formula:

Beginning Inventory + $70,000 - $35,000 = $45,000

Therefore, the beginning inventory was $10,000.