Question

Sheridan's beginning inventory is $40,000, goods purchased during the period cost $125,000, and the cost of goods sold for the period is $145,000. What is the amount of its ending inventory?

Answer 1

To calculate the ending inventory, use the formula: Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold. Substituting the given values, the ending inventory is $20,000.

Step-by-step explanation:

To calculate the ending inventory, we can use the formula:

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

Substituting the given values:

Ending Inventory = $40,000 + $125,000 - $145,000 = $20,000

Therefore, the amount of Sheridan's ending inventory is $20,000.