how do you calculate purchases when ending inventory is not avaliable

Solutions

Expert Solution

1. Purchase inventory/Purchases can be found out by the formula :-

(Closing inventory - Opening inventory) + Cost of Goods Sold = Purchases.

2. But where in the question ending inventory is not present and we have to find out the purchase, then the formula can be :-

Cost of goods sold - Beginning inventory = Purchases.

3. After finding out the purchases we can now find out the Closing/Ending Inventory by the formula :-

Purchases + Beginning Inventory - Cost of Goods Sold = Closing/Ending Inventory.

So, in the above question the 2nd formula can be used to find out the purchases.

ekkarill92 answered 1 year ago

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