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28 December, 07:32

At the beginning of the year, Johnson Supply has inventory of $5,200. During the year, the company purchases an additional $20,000 of inventory. An inventory count at the end of the year reveals remaining inventory of $3,000. What amount will Bennett report for cost of goods sold?

a. $8,200

b. $17,800

c. $20,000

d. $22,200

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  1. 28 December, 09:22
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    d. $22,200

    Explanation:

    Costs of goods sold are the expenses incurred in the production of products sold by a firm. Calculating the cost of goods sold (COGS) is as follows

    COGS=Opening Inventory+Purchases - Closing Inventory.

    In this case:

    Opening inventory is $5,200

    Purchases : $20,000

    Closing inventory is $ 3,000

    Therefore:

    COGS = $5,200 + $20,000 - $3,000

    COGS = $22,200
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