Company X sells widgets. The following information summarizes the company's operating activities for the year: What is cost of goods sold?
A)$9,500
B)$6,000
C)$8,000
D)$13,000

Question

Company X sells widgets. The following information summarizes the company's operating activities for the year:  What is cost of goods sold?
A)$9,500 
B)$6,000 
C)$8,000 
D)$13,000

Quizplus · Accepted Answer

The cost of goods sold can be calculated by subtracting the cost of beginning inventory from the cost of goods available for sale and adding the cost of ending inventory. Based on the information provided, the cost of goods available for sale is $15,000 ($10,000 beginning inventory + $20,000 purchases), and the cost of ending inventory is $7,000. Therefore, the cost of goods sold is $8,000 ($15,000 - $7,000).

Company X Sells Widgets