Stone Pine Corporation, a calendar year taxpayer, has ending inventory of $160,000 on December 31, 2018. During the year, the corporation purchased additional inventory of $415,000. If cost of goods sold for 2018 is $470,000, what was the beginning inventory at January 1, 2018?

Question

Business

Reina Mckay

3 December, 21:54

Stone Pine Corporation, a calendar year taxpayer, has ending inventory of $160,000 on December 31, 2018. During the year, the corporation purchased additional inventory of $415,000. If cost of goods sold for 2018 is $470,000, what was the beginning inventory at January 1, 2018?

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Answers (1)

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Honey · Answer 1

The answer is $215,000

Explanation:

Cost of goods sold equal:

Opening/beginning inventory plus purchases minus closing/ending inventory

To find beginning inventory at January 1, 2018, lets rearrange the formula:

Cost of goods sold minus plus purchases plus closing/ending inventory.

Cost of sales is $470,000

Purchases is $415,000

Ending inventory is $160,000

Therefore, beginning inventory at January 1, 2018 is

$470,000 - $415,000 + $160,000

=$215,000