Thompson Company updates its inventory records perpetually.The company's records showed a beginning inventory of $600,cost of goods sold of $1,400,and ending inventory of $800.How much inventory was purchased during the year?
A) $1,200
B) $1,000
C) $900
D) $1,600

Question

Quizplus · Accepted Answer

Using the formula:
Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold
we can rearrange the equation to solve for Purchases:
Purchases = Cost of Goods Sold + Ending Inventory - Beginning Inventory

Plugging in the given values, we get:
Purchases = $1,400 + $800 - $600
Purchases = $1,600

Therefore, the inventory purchased during the year was $1,600.

Thompson Company Updates Its Inventory Records Perpetually