Question

Elm Corporation is a merchandising company. The year began with inventory of $20,000, Purchases for the year were $45,000, and the Ending Inventory was $7,000. What is the Cost of Goods Sold that would be reported on the income statement

Answer 1

COGS= $58,000

Step-by-step explanation:

Giving the following information:

The year began with an inventory of $20,000, Purchases for the year were $45,000, and the Ending Inventory was $7,000.

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

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

COGS= 20,000 + 45,000 - 7,000

COGS= $58,000