Question

Russell Retail Group begins the year with inventory of $50,000 and ends the year with inventory of $40,000. During the year, the company has four purchases for the following amounts.

Purchase on February 17 $ 205,000
Purchase on May 6 125,000
Purchase on September 8 155,000
Purchase on December 4 405,000
Required:
Calculate cost of goods sold for the year.

Answer 1

COGS= $900,000

Step-by-step explanation:

Giving the following formula:

Beginning inventory= $50,000

Ending inventory= $40,000

Purchase on February 17 $ 205,000

Purchase on May 6 125,000

Purchase on September 8 155,000

Purchase on December 4 405,000

Total= $890,000

To calculate the cost of goods sold, we need to use the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 50,000 + 890,000 - 40,000

COGS= $900,000