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Russell Retail Group begins the year with inventory of $55,000 and ends the year with inventory of $45,000. During the year, the company has four purchases for the following amounts. Purchase on February 17 $ 210,000 Purchase on May 6 130,000 Purchase on September 8 160,000 Purchase on December 4 410,000

Required: Calculate cost of goods sold for the year.

Answer :

Answer:

The cost of goods sold for the year is $920,000

Explanation:

The formula to compute the cost of goods sold is shown below:

Cost of goods sold = Opening inventory + Purchase - ending inventory

where,

Purchase = $210,000 + $130,000 + $160,000 + $410,000

                 = $910,000

And, the other values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $55,000 + $910,000 - $45,000

= $920,000

Tundexi

The amount of Cost of goods sold is $920,000

Cost of goods sold refers to the amount of direct cost that is incurred in the production of goods or services.

  • Let understand that formulae for deriving Cost of goods sold is Opening inventory + Purchase - Ending inventory

  • Now, we have to first derive the amount of Purchase and this is calculated as follows:

Purchase = Amount on Feb 17 + Amount on May 6 + Amount on Sept 8 + Amount on Dec 4

Purchase = $210,000 + $130,000 + $160,000 + $410,000

Purchase = $910,000

In conclusion, the total amount of purchase is $910,000

  • Now, we have to first calculate the amount of Cost of goods sold and this is calculated as follows:

Cost of goods sold = Opening inventory + Purchase - Ending inventory

Cost of goods sold = $55,000 + $910,000 - $45,000

Cost of goods sold = $920,000

In conclusion, the total amount of Cost of goods sold is $920,000.

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