Homework SourseGrappa Inc reported the following information for 2017 and 2
Grappa, Inc. reported the following information for 2017 and 2016:
How much is cost of goods sold for 2017?
| 2017 | 2016 | ||
| Sales | $951,200 | $890,000 | |
| Sales discounts | 12,000 | 23,000 | |
| Purchases | 580,000 | 600,000 | |
| Inventory, December 31 | 46,000 | 40,000 | |
| Transportation-in | 18,000 | 19,000 | |
| Purchase discounts | 4,000 | 5,000 |
Solution
Cost of goods sold = cost of goods available for sale less ending inventory
Cost of goods available for sale = opening stock plus net purchases other costs = 40,000 + 580,000 + 18,000 - 4,000
= 634,000
Cost of goods sold = 634,000 - 46,000 = 588,000
