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Exercise 6-1A Calculate cost of goods sold (LO6-2) Russell Retail Group begins the year with inventory of $55,000 and ends the year with inventory of $45,000. During the year, the company has four purchases for the following amounts. Purchase on February 17 $ 210,000 Purchase on May 6 130,000 Purchase on September 8 160,000 Purchase on December 4 410,000 Required: Calculate cost of goods sold for the year.

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Answer:

COGS= $920,000

Explanation:

Giving the following information:

Beginning inventory= $55,000

Ending inventory= $45,000

Purchases= 210,000 + 130,000 + 160,000 + 410,000= $910,000

To calculate the cost of goods sold (COGS), we need to use the following formula:

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS=  55,000 + 910,000 - 45,000

COGS= $920,000

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