Question

Meadow View Inc. has sales revenue of $68,000, beginning inventory of $12,000, purchases of $43,000, and ending inventory of $10,000. The cost of goods sold is:

a. $55,000
b. $45,000
c. $21,000
d. $41,000
e. $23,000

Answer 1

The cost of goods sold for Meadow View Inc. is calculated to be $45,000, which is obtained by adding the beginning inventory to purchases and subtracting the ending inventory.

Step-by-step explanation:

The cost of goods sold (COGS) for Meadow View Inc. can be calculated by adding the beginning inventory to purchases and subtracting the ending inventory. To determine COGS, use the following formula: Beginning Inventory + Purchases – Ending Inventory = COGS. Based on the information provided, the calculation is as follows:

Beginning Inventory: $12,000
Purchases: $43,000
Ending Inventory: $10,000

So, COGS = $12,000 + $43,000 - $10,000 = $45,000. Therefore, the correct answer is (b) $45,000.