Question

Ace electronics had COGS of $20,000. If purchases of inventory were $23,000 and EI was $6,000, Ace's BI must have been what?

Answer 1

The beginning inventory (BI) of Ace electronics must have been $9,000.

Step-by-step explanation:

To find the beginning inventory (BI), we can use the formula:

BI = Purchases + Ending Inventory - Cost of Goods Sold (COGS)

Given that COGS is $20,000, purchases are $23,000, and ending inventory (EI) is $6,000, we can rearrange the formula to solve for BI:

BI = Purchases + EI - COGS

Substituting the values:

BI = $23,000 + $6,000 - $20,000

BI = $9,000

Therefore, the beginning inventory is $9,000.