At the beginning of the year, Johnson Supply has inventory of $5,200. During the year, the company purchases an additional $20,000 of inventory. An inventory count at the end of the year reveals remaining inventory of $3,000. What amount will Bennett report for cost of goods sold?

a. $8,200

b. $17,800

c. $20,000

d. $22,200

Question

Business

Laney Mccoy

28 May, 19:07

At the beginning of the year, Johnson Supply has inventory of $5,200. During the year, the company purchases an additional $20,000 of inventory. An inventory count at the end of the year reveals remaining inventory of $3,000. What amount will Bennett report for cost of goods sold?

a. $8,200

b. $17,800

c. $20,000

d. $22,200

+3

Answers (1)

Know the Answer?

Mariana Ryan · Answer 1

d. $22,200

Explanation:

Costs of goods sold are the expenses incurred in the production of products sold by a firm. Calculating the cost of goods sold (COGS) is as follows

COGS=Opening Inventory+Purchases - Closing Inventory.

In this case:

Opening inventory is $5,200

Purchases : $20,000

Closing inventory is $ 3,000

Therefore:

COGS = $5,200 + $20,000 - $3,000

COGS = $22,200