Question

A company, using the periodic inventory system, has merchandise inventory costing $210 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is

Answer 1

Answer:

The answer is: The COGS is $635

Explanation:

We will use the following entries:

• Initial merchandise inventory                                 $210
• Purchased merchandise inventory                        $635
• Ending merchandise inventory                              $160

Cost of goods sold = initial inventory + purchases - ending inventory

Cost of goods sold = $210 + $635 - $160 = $685