Question

During the year, Keowee Corp. sold $1,550 of inventory. The company's beginning inventory was $1,200, and the ending inventory was $740. How much inventory did the company purchase during the year?

Answer 1

Keowee Corp. purchased $1,090 worth of inventory during the year by applying the inventory equation and determining the additional inventory needed on top of the beginning inventory to cover sales and have the ending inventory.

Step-by-step explanation:

To calculate the amount of inventory Keowee Corp. purchased during the year, we use the inventory equation:

Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold (COGS)

Given:

• Beginning Inventory = $1,200
• Ending Inventory = $740
• Cost of Goods Sold (COGS) = $1,550 (which is the inventory sold)

We need to solve for Purchases:

Purchases = Ending Inventory - Beginning Inventory + COGS

Purchases = $740 - $1,200 + $1,550

Purchases = $1,090

Thus, Keowee Corp. purchased $1,090 of inventory during the year.