Firm X purchased $30,000 worth of inventory when they opened for business, adding to the $20,000 included in the acquisition. At the end of the first quarter, inventory was valued at $23,000. What was cost of goods sold (COGS) for the quarter?

a. $23,000

b. $27,000

c. $30,000

d. $50,000

The answer is B. $27,000

Explanation:

The cost of goods sold for the quarter is $27,000.

Cost of goods sold which is also known as cost of sales is the total amount or cost of goods used in providing services or making sales.

To calculate cost of goods sold;

Opening stock/inventory plus purchases minus closing inventory/stock.

Opening inventory =. $20,000

plus Purchases. =. $30,000

minus Closing inventory = ($23,000)

Cost of goods sold =. $27,000.

Therefore, the cost of goods sold is $27,000.

To get gross profit, this cost of sales will be substracted from Sales or revenue.