Question

The 2011 and 2012 Balance Sheets for Jacob, Inc. contained the following entries: 3 / 3 points Accounts receivable Inventories Net fixed assets Accounts payable 12/31/2011 12/31/2012 $720 $452 $584 $816 $637 $659 $413 $611 Jacob had materials purchases in 2011 of $1,753 and materials purchases in 2012 of $1,957 . What did Jacob record as Cost of Goods Sold (COGS) on its 2012 income statement

Answer 1

Cost of Goods Sold (COGS) on its 2012 income statement $1723

Step-by-step explanation:

Jacob, Inc.

12/31/2011 12/31/2012

Accounts receivable $720 $452

Inventories $584 $816

Net fixed assets $637 $659

Accounts payable $413 $611

Jacob had materials purchases in 2011 of $1,753 and materials purchases in 2012 of $1,957.

This COGS is calculated by the following formula :

Cost of Goods Sold (COGS) = Beginning Inventory + Material Purchases - Ending Inventory

COGS= $ 584 + $ 1957 - $ 816= $ 1723

Calculations

Ending Inventories $ 816

Less Beginning Inv $ 584

Difference $ 234

Materials Purchases (2012) $1,957

Difference $ 234

Cost of Goods Sold (COGS) on its 2012 income statement $1723