Question

Carr Corporation has provided the following information for its most recent month of operation: sales $8,000; beginning inventory $1,000; ending inventory $2,000 and gross profit $5,000. How much were Carr's inventory purchases during the period?a. $9,000.00 b. $5,000.00 c. $6,000.00 d. $4,000.00

Answer 1

d. $4,000.00

Step-by-step explanation:

This question presents an incomplete record scenario. With the Purchases amount missing.

Find the Purchases amount by preparing a Trading Account and determine the missing Purchases Amount.

Carr's inventory purchases during the period was $2,000

Trading Account

Sales $8,000

Less Cost of Sales

beginning inventory $1,000

Add Purchases $4,000

Less Ending inventory ($2,000) ($3,000)

Gross profit $5,000