Question

Problem 3-4 (Algorithmic)
Inventories (LO 3.2)

Kevin owns a retail store, and during the current year he purchased $829,600 worth of inventory. Kevin's beginning inventory was $82,960, and his ending inventory is $99,552. During the year, Kevin withdrew $16,592 in inventory for his personal use. Assume that he uses the cost method to value the inventory and there was no change in determining quantities, costs, or valuations between opening and closing inventory.

Use Part III of Schedule C below to calculate Kevin's cost of goods sold for the year. Enter all amounts as positive numbers.

Part III

Cost of Goods Sold (see instructions)

33	Method(s) used to
	value closing inventory:        Cost
34	Was there any change in determining quantities, costs, or valuations between opening and closing inventory?
	If "Yes," attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    No

35	Inventory at beginning of year. If different from last year's closing inventory, attach explanation . . . .	35
36	Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
37	Cost of labor. Do not include any amounts paid to yourself. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37
38	Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
39	Other costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
40	Add lines 35 through 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	40
41	Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
42	Cost of goods sold. Subtract line 41 from line 40. Enter the result here and on line 4 . . . . . . . .	42

Answer 1

	Cost of goods sold
Line 35	Inventory at beginning of year.	82,960
Line 36	Purchases less cost of items withdrawn for personal use	813,008
	(829,600-16,592)
Line 37
Line 38
Line 39
Line 40	Add lines 35 through 39	895,968
Line 41	Inventory at end of year	99,552
Line 42	Cost of goods sold	796,416