Question

McLeod Corporation is a merchandising company. The year began with inventory of $18,000, Purchases for the year were $43,000, and the Ending Inventory was $5,000. What is the Cost of Goods Sold that would be reported on the income statement

Answer 1

The Cost of Goods Sold to be reported on Income Statement is $56000

Step-by-step explanation:

The Cost of Goods sold is the cost that pertains to the inventory cost related to the sales made in a certain period of time. The cost of goods sold can be calculated as,

Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory

Thus, for Mcleod Corporation, the cost of goods sold is:

Cost of Goods Sold = 18000 + 43000 - 5000 = $56000