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The beginning balance in Inventory on Company A’s Year 2 Balance Sheet is $20,000. The company purchased inventory for $200,000 during Year 2, sold inventory with book value of $105,000 for $145,000. What is the ending balance in Inventory on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

 
 
 
 
 
 

Correct answer. The Ending Balance in Inventory (?) = the Beginning Balance in Inventory 20,000 + Purchase 200,000 – Cost of Goods Sold (COGS) 105,000 = 115,000

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