Question

Dave's Duds reported cost of goods sold of $2,400,000 this year. The inventory account increased by $130,000 during the year to an ending balance of $595,000. What was the cost of merchandise that Dave's purchased during the year?

Answer 1

$2,530,000

Step-by-step explanation:

Opening Balance of Inventory:

= Ending Balance of Inventory - Inventory account increased Compare to Beginning

= $595,000 - $130,000

= $465,000

Cost of Inventory purchased during the year:

= Cost of Goods Sold + Ending Balance of Inventory - Opening Balance of Inventory

= $2,400,000 + $595,000 - $465,000

= $2,530,000