Question

Cost of goods sold computation LO P1 Unimart Precision Manufacturing Beginning inventory Merchandise $ 275,000 Finished goods $ 450,000 Cost of purchases 500,000 Cost of goods manufactured 900,000 Ending inventory Merchandise 115,000 Finished goods 375,000. Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.

Answer 1

$660,000 and $975,000

Step-by-step explanation:

We know that

Cost of goods sold = Opening inventory + Purchase - ending inventory

For Unimart, it would be

= $275,000 + $500,000 - $115,000

= $660,000

And, for Precision Manufacturing, it would be

= $450,000 + $900,000 - $375,000

= $975,000

We simply applied the above formula to find out the cost of goods sold