Ralph's Dairy started with $5,000 in Inventory and had the following transaction totals for the month:
Sales $10,000
Sales Returns and Allowances 1,000
Cost of Goods Sold 5,500
Purchases 7,000
Freight 500
Purchases Returns and Allowances 1,000
Purchases Discounts 700
Based on the above, ending Inventory for the period is
A) $4,300.
B) $6,300.
C) $5,300.
D) $5,800.

Question

Ralph's Dairy started with $5,000 in Inventory and had the following transaction totals for the month: 
Sales $10,000
Sales Returns and Allowances 1,000
Cost of Goods Sold 5,500
Purchases 7,000
Freight 500
Purchases Returns and Allowances 1,000
Purchases Discounts 700
Based on the above, ending Inventory for the period is
A) $4,300.
B) $6,300.
C) $5,300.
D) $5,800.

Quizplus · Accepted Answer

Beginning Inventory + Purchases - Purchase Returns and Allowances - Purchase Discounts + Freight-In - Cost of Goods Sold = Ending Inventory 
$5,000 + $7,000 - $1,000 - $700 + $500 - $5,500 = $5,300

Ralph's Dairy Started with $5,000 in Inventory and Had the Following