Cable Knit, Inc. reported cost of goods sold of $3,800 for the current year. Its beginning inventory was $3,900 and its ending inventory was $1,400. What was the amount of purchases made during the year?

Question

Mathematics

Liana Gilmore

11 January, 10:26

Cable Knit, Inc. reported cost of goods sold of $3,800 for the current year. Its beginning inventory was $3,900 and its ending inventory was $1,400. What was the amount of purchases made during the year?

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Answers (1)

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Harvey · Answer 1

Purchases made during the year is $1300.

Step-by-step explanation:

The beginning Inventory is reported to be $3900

The ending inventory is reported to be $1400

The cost of goods sold, (Sales) is reported to be $3800

We can relate the above mentioned items using the formula

Ending Inventory = Beginning Inventory + Purchases - Sales

$1400 = $3900 + Purchases - $3800

Therefore the amount of purchase made during the year,

Purchases = $1400 - $100

= $1300.