Question

A company has beginning inventory for the year of $10,500. During the year, the company purchases inventory for $160,000 and ends the year with $23,000 of inventory. The company will report cost of goods sold equal to: Multiple Choice $183,000. $172,500. $147,500. $160,000.

Answer 1

The correct answer is $147,500.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Beginning inventory = $10,500

Purchase inventory = $160,000

Ending inventory = $23,000

So, we can calculate the cost of goods sold by using following method:

Cost of goods sold = Beginning inventory + Purchase inventory - Ending Inventory

By putting the value, we get,

Cost of goods sold = $10,500 + $160,000 - $23,000

= $147,500