Sweetwater Co. updates its inventory perpetually. The company reported a beginning inventory of $3,000. During the year,
Question:
Sweetwater Co. updates its inventory perpetually. The company reported a beginning inventory of $3,000. During the year, the company recorded inventory purchases of $9,000 and cost of goods sold of $10,000.
What was the amount of its ending inventory?
The ending inventory is the value of inventory left unsold in the business after a particular period. This ending inventory becomes the beginning inventory of the next period. To compute the ending inventory three items are required beginning inventory if any, consumption or cost of goods sold and purchases. Using these three items in the below equation the ending inventory is computed:
Equation: Ending Inventory = Beginning Inventory + Inventory Purchased - Cost of Goods Sold
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.