Question

Bristol Retail Group begins the year with an inventory of 50,000 and ends the year with an inventory of 40,000. During the year, the company has four purchases for the following amounts. What is the total amount of purchases made by the company during the year?

1) $10,000
2) $20,000
3) $30,000
4) $40,000

Answer 1

The total amount of purchases made by Bristol Retail Group during the year can be calculated by subtracting the ending inventory from the beginning inventory and adding the cost of goods sold. In this case, the beginning inventory is $50,000 and the ending inventory is $40,000.

Step-by-step explanation:

The total amount of purchases made by Bristol Retail Group during the year can be calculated by subtracting the ending inventory from the beginning inventory and adding the cost of goods sold. In this case, the beginning inventory is $50,000 and the ending inventory is $40,000. The formula for calculating the total amount of purchases is:

Total purchases = Beginning inventory + Cost of goods sold - Ending inventory

Since the cost of goods sold is not provided in the question, we can't calculate the exact total amount of purchases. However, we can eliminate option 1 and option 2 as they would result in a negative ending inventory, which is not possible. That leaves us with option 3 and option 4 as the possible total amount of purchases made by the company.