Question

Larkspur Co. had cost of goods sold of $3,100. If beginning inventory was $3,200 and ending inventory was $1.050. Larkspur's purchases must have been:___________.

a. $950
b. $1,150
c. $2,150
d. $5.250

Answer 1

Answer: Larkspur's purchases = $950

Explanation: From the information given:

Cost of Goods Sold = $3,100.

Beginning inventory = $3,200

Ending inventory = $1,050

We can obtain the price of the purchases.

We know that: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold.

Therefore: Beginning Inventory + Ending Inventory - Cost of Goods Sold = Purchases.

Thus: $3,200 + $1,050 - $3,100 = $950

Answer 2

cost of goods purchased= $950

Step-by-step explanation:

Giving the following information:

Larkspur Co. had cost of goods sold of $3,100.

Beginning inventory was $3,200

Ending inventory was $1,050

To calculate the purchases, we need to use the following formula:

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

3,100 = 3,200 + cost of goods purchased - 1,050

cost of goods purchased= 950