Question

Bill Rose owns Rose Sporting Goods. At the beginning of the year, Rose Sporting Goods had $2,700 in inventory. During the year, Rose Sporting Goods purchased inventory that cost $13,300. At the end of the year, inventory on hand amounted to $3,900.
Required
a. Calculate the cost of goods available for sale during the year.

Goods available for sale Goods available for sale L .

b. Calculate the cost of goods sold for the year.

c. Calculate the amount of inventory Rose Sporting Goods would report on its year-end balance sheet.

Answer 1

Answer of Part a:

Goods Available for Sale = Beginning Inventory + Purchases Inventory
Goods Available for Sale = $2,700 + $13,300
Goods Available for Sale = $16,000

Answer of Part b:

Cost of Goods Sold = Beginning Inventory + Purchases Inventory – Ending Inventory
Cost of Goods Sold = $2,700 + $13,300 - $3,900
Cost of Goods Sold = $12,100

Answer of Part c:

The Merchandise Inventory year end balance is $3,900 that would be reported.