Question

ABC Company is a merchandising business. In Year 1, the business experienced the following events:

1. Acquired $1,000 cash from the issue of common stock
2. Purchased inventory for $530 cash.
3. Sold inventory costing $490 for $730.
What is the value of ABC Company's ending merchandise inventory?
a) $240
b) $490
c) $40
d) $530

Answer 1

c) $40

Step-by-step explanation:

Purchase of Inventory $530

Less: Cost of inventory sold $490

Ending merchandise inventory $40