Question

Seasons has sales of $42,000, beginning inventory of $4,900, purchases of $24,500, and ending inventory of $3,500. The cost of goods sold is:

A) $29,400.
B) $25,900.
C) $16,100.
D) $23,100.

Answer 1

The cost of goods sold is $25,900.

Step-by-step explanation:

To calculate the cost of goods sold, you need to subtract the ending inventory from the sum of the beginning inventory and purchases. In this case, the beginning inventory is $4,900 and the purchases are $24,500, so the total inventory available is $29,400 ($4,900 + $24,500). Subtracting the ending inventory of $3,500 from the total inventory gives you the cost of goods sold, which is $25,900.