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QUESTION 9/11
According to the Ending Inventory Report, how would you calculate the cost of Sales?
Ending Inventory Report
| Administrative Salaries | $100,000 |
|---|---|
| Amortization Expense | $20,000 |
| Beginning Inventory | $75,000 |
| Ending Inventory | $60,000 |
| Office Supplies Expense | $25,000 |
| Purchases | $125,000 |
| Travel & Entertainment Expense | $5,000 |
A.) $75,000 + 125,000 – $60,000
B.) $125,000 – $20,000
C.) $75,000 + 125,000 – $60,000 + $20,000
D.) $75,000 – $60,000
E.) $75,000 + 125,000 – $60,000 – $20,000
Revelant knowledge
Ending inventory is the inventory you are able to sell remaining at the conclusion of the accounting period. When an accounting period comes to an end, will take inventory of the initial inventory then add your net purchases and subtract the value of sales (COGS) to determine the value of your end inventory.
Sales costs
Answer is: a) $75,000 + 125,000 – $60,000