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10 September, 17:46

McLeod Corporation is a merchandising company. The year began with inventory of $18,000, Purchases for the year were $43,000, and the Ending Inventory was $5,000. What is the Cost of Goods Sold that would be reported on the income statement

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  1. 10 September, 17:58
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    The Cost of Goods Sold to be reported on Income Statement is $56000

    Explanation:

    The Cost of Goods sold is the cost that pertains to the inventory cost related to the sales made in a certain period of time. The cost of goods sold can be calculated as,

    Cost of Goods Sold = Opening Inventory + Purchases - Closing Inventory

    Thus, for Mcleod Corporation, the cost of goods sold is:

    Cost of Goods Sold = 18000 + 43000 - 5000 = $56000
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