Question

A company provided the following data: sales, $630,000; beginning inventory, $53,000; ending inventory, $58,000; and gross profit, $267,000. What was the amount of inventory purchased during the year?

A. $635,000.
B. $368,000.
C. $358,000.
D. $363,000.

Answer 1

The amount of inventory purchased during the year was $368,000, which can be calculated using the Cost of Goods Sold formula and the data provided for sales, beginning inventory, ending inventory, and gross profit. Therefore correct option is B

Step-by-step explanation:

To determine the amount of inventory purchased during the year for the company provided in the question, we must use the formula: Cost of Goods Sold (COGS) = Beginning Inventory + Purchases - Ending Inventory.

We know that sales were $630,000 and the gross profit was $267,000.

Therefore, we can deduce that COGS is $630,000 - $267,000 = $363,000.

Now, with Beginning Inventory being $53,000 and Ending Inventory $58,000, we insert these into the formula: $363,000 = $53,000 + Purchases - $58,000.

Solving this equation gives us Purchases of $363,000 + $58,000 - $53,000 = $368,000.