Brief Exercise 5-1 Presented below are the components in determining cost of goods sold. Determine the missing amounts. Beginning Inventory Purchases Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold (a) $81,100 $98,900 $ $ $122,000 (b) $48,100 $ $116,000 $36,300 $ (c) $ $119,000 $158,000 $29,300

A. Ending Inventory = $58,000

B. Purchases = $67,900; Cost of goods sold = $79,700

C. Beginning Inventory = $39,000; Cost of goods sold = $128,700

Explanation:

The following statement is used to calculate cost of goods sold:

Beginning Inventory

Add: Purchases

Cost of Goods Available for Sale

Less: Ending Inventory

Cost of Goods Sold

Requirement (A)

Beginning Inventory                         = $81,100

Add: Purchases                               = $98,900

Cost of Goods Available for Sale   = $180,000

Less: Ending Inventory                    = $58,000   (Note - 1)

Cost of goods sold                          = $122,000

Note - 1

Cost of Goods Available for Sale - Ending Inventory = Cost of goods sold

$180,000 - Ending Inventory = $122,000

or, - Ending Inventory = $122,000 - $180,000

Therefore, Ending Inventory = $58,000

Requirement (B)

Beginning Inventory                        = $48,100

Add: Purchases                               = $67,900 (Note - 2)

Cost of Goods Available for Sale   = $116,000

Less: Ending Inventory                    = $36,300  

Cost of goods sold                          = $79,700 (Note - 3)

Note - 2

Beginning Inventory + Purchases = Cost of Goods Available for Sale

or, $48,100 + Purchases = $116,000

or, Purchases = $116,000 - $48,100

Purchases = $67,900

Note - 3

Cost of Goods Available for Sale - Ending Inventory = Cost of goods sold

$116,000 - 36,300 = Cost of goods sold

Cost of goods sold = $79,700

Requirement (C)

Beginning Inventory                        = $39,000  (Note - 4)

Add: Purchases                               = $119,000

Cost of Goods Available for Sale   = $158,000

Less: Ending Inventory                    = $29,300  

Cost of goods sold                          = $128,700

Note - 4

Beginning Inventory + Purchases = Cost of Goods Available for Sale

or, Beginning Inventory + $119,000 = $158,000

or, Beginning Inventory = $158,000 - $119,000

Beginning Inventory = $39,000

by knowing conditionality

explanation: