Question

Beginning inventory was $50,000. Inventory purchased during the year cost $75,000. Inventory on hand at year-end was $40,000. Cost of goods sold was

a)$85,000
b)$75,000
c)$165,000
d)$65,000
e)$125,000

Answer 1

The cost of goods sold is $85,000.

Step-by-step explanation:

In this question, we are given the beginning inventory, inventory purchased during the year, inventory on hand at year-end, and cost of goods sold. To calculate the cost of goods sold, we can use the formula:

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

Substituting the given values, we have:

Cost of Goods Sold = $50,000 + $75,000 - $40,000 = $85,000

Therefore, the correct answer is (a) $85,000.