Question

Cedar Co. updates its inventory periodically. The company's beginning inventory was $4,860 and purchases were $10,080 during the year. The company's ending inventory count was $9,000. What was the amount of its cost of goods sold?

a. $5,940
b. $14,940
c. $23,940
d. $3,780

Answer 1

The cost of goods sold for Cedar Co. is calculated using the beginning inventory, purchases, and the ending inventory. After performing the calculations, the COGS is found to be $5,940.

Step-by-step explanation:

To calculate the cost of goods sold (COGS) for Cedar Co., we use the following formula:

COGS = Beginning Inventory + Purchases - Ending Inventory

Given the company's beginning inventory of $4,860 and purchases of $10,080 during the year, and considering the ending inventory is $9,000, we can calculate the COGS as follows:

• COGS = $4,860 + $10,080 - $9,000
• COGS = $14,940 - $9,000
• COGS = $5,940

Therefore, the correct answer is a. $5,940.