Question

On December 31st, Aubie has cost of goods sold of $734,000 and ending inventory of $123,000. The beginning inventory for the year had been $95,000. Calculate the purchases from suppliers, assume all on account.

Answer 1

The purchases from suppliers for Aubie, calculated using the inventory accounting formula, is $762,000 for the year, assumed all on account.

Step-by-step explanation:

To calculate the purchases from suppliers for Aubie, we need to use the following formula that is applied in inventory accounting:

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

Aubie's COGS is $734,000, ending inventory is $123,000, and beginning inventory is $95,000.

So, the calculation is:

Purchases = $734,000 + $123,000 - $95,000

Purchases = $762,000

Thus, the purchases from suppliers for the year, assumed all on account, is $762,000.