All of the information required in the computation of cost of goods sold is presented below, except for purchases, which must be what amount? $\begin{array}{lc}
\text { Purchase discounts } & \$ 200 \
\text { Inventory, December } 31 & 1,500 \
\text { Cost of goods sold } & 9,500 \
\text { Purchases } & ? \
\text { Inventory, January 1 } & 1,500 \
\text { Freight-in } & 500
\end{array}$
A)$ 9, 800
B)$10, 200
C)$ 8, 700
D)$ 9, 200

Question

Quizplus · Accepted Answer

The formula for calculating the cost of goods sold (COGS) is: COGS = Opening Inventory + Purchases + Freight-in - Purchase Discounts - Closing Inventory. Plugging in the given values: $9,500 = $1,500 + Purchases + $500 - $200 - $1,500. Solving for Purchases gives $9,200.

All of the Information Required in the Computation of Cost