Cost of Goods Sold

[KWF]

If a business had the following merchandise for sale for a particular month, the cost of goods sold would be determined as follows:

$1000.00 cost of inventory at the beginning of the month+ $500.00 purchase of materials during the month - $800.00 ending inventory at the end of the month
$700.00 = cost of good sold for the month $1,500.00 - $800.00

If there are not purchases made during that month, could the cost of goods sold still be determined?

The beginning inventory would be $1000.00 and the ending inventory amount would be $800.00.

1. Would this indicate that $200.00 of merchandise was sold?

2. Suppose that the opposite situation occurred: the ending inventory amount ($1000.00) was more than the beginning inventory amount ($800.00), would this indicate that no goods were sold?

 

[Deleted member 4993]

If a business had the following merchandise for sale for a particular month, the cost of goods sold would be determined as follows:

$1000.00 cost of inventory at the beginning of the month+ $500.00 purchase of materials during the month - $800.00 ending inventory at the end of the month
$700.00 = cost of good sold for the month $1,500.00 - $800.00

If there are not purchases made during that month, could the cost of goods sold still be determined?

The beginning inventory would be $1000.00 and the ending inventory amount would be $800.00.

1. Would this indicate that $200.00 of merchandise was sold?

2. Suppose that the opposite situation occurred: the ending inventory amount ($1000.00) was more than the beginning inventory amount ($800.00), would this indicate that no goods were sold?

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:

https://www.freemathhelp.com/forum/threads/read-before-posting.109846/#post-486520​

Please share your work/thoughts about this problem.

 

[KWF]

Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:

https://www.freemathhelp.com/forum/threads/read-before-posting.109846/#post-486520​

Please share your work/thoughts about this problem.

I am perplexed at 1. and 2. I have not tried any solution because I do not know on any. I understand the introduction to my questions, but 1> and 2. I have no idea for an answer!

 

[HallsofIvy]

If a business had the following merchandise for sale for a particular month, the cost of goods sold would be determined as follows:

$1000.00 cost of inventory at the beginning of the month+ $500.00 purchase of materials during the month - $800.00 ending inventory at the end of the month
$700.00 = cost of good sold for the month $1,500.00 - $800.00

If there are not purchases made during that month, could the cost of goods sold still be determined?

The beginning inventory would be $1000.00 and the ending inventory amount would be $800.00.

1. Would this indicate that $200.00 of merchandise was sold?

Unless something else happened to the merchandise, yes! Of course, it is possible that some inventory rotted or some was stolen or destroyed in a fire! If you are not told that, I think assuming that the "missing" inventory was sold is reasonable.

2. Suppose that the opposite situation occurred: the ending inventory amount ($1000.00) was more than the beginning inventory amount ($800.00), would this indicate that no goods were sold?

Not necessarily. The fact that ending inventory was greater than beginning inventory, by $200.00, means that some more inventory was purchased. All we can say was that the new inventory was $200.00 more than the inventory sold.

 

[Explain this!]

Unless something else happened to the merchandise, yes! Of course, it is possible that some inventory rotted or some was stolen or destroyed in a fire! If you are not told that, I think assuming that the "missing" inventory was sold is reasonable.


Not necessarily. The fact that ending inventory was greater than beginning inventory, by $200.00, means that some more inventory was purchased. All we can say was that the new inventory was $200.00 more than the inventory sold.

I want to thank you for your replies!

 

[KWF]

Unless something else happened to the merchandise, yes! Of course, it is possible that some inventory rotted or some was stolen or destroyed in a fire! If you are not told that, I think assuming that the "missing" inventory was sold is reasonable.


Not necessarily. The fact that ending inventory was greater than beginning inventory, by $200.00, means that some more inventory was purchased. All we can say was that the new inventory was $200.00 more than the inventory sold.

I want to thank you for your explanations and comments to my questions!

 

[JeffM]

here is the equation in words

Beginning Inventory at Cost + Cost of Goods Purchased - Cost of Goods Sold = Ending Inventory at Cost

Knowing any three, you can find the fourth.