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If the opening inventory is valued at $10,000, purchases during the year are $60,000, wages amount to $5,000, and carriage inwards is $3,000, what is the cost of goods sold if the closing inventory is valued at $20,000?
  • a)
    $58,000
  • b)
    $48,000
  • c)
    $68,000
  • d)
    $78,000
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
If the opening inventory is valued at $10,000, purchases during the ye...
The cost of goods sold (COGS) is calculated as:
COGS = Opening Inventory + Purchases + Wages + Carriage Inwards - Closing Inventory
COGS = $10,000 + $60,000 + $5,000 + $3,000 - $20,000 = $58,000
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Most Upvoted Answer
If the opening inventory is valued at $10,000, purchases during the ye...
Understanding Cost of Goods Sold (COGS)
To calculate the Cost of Goods Sold (COGS), we need to follow a systematic approach using the given inventory data.
Step 1: Calculate Total Goods Available for Sale
- Opening Inventory: $10,000
- Purchases: $60,000
- Carriage Inwards: $3,000
Total Goods Available for Sale = Opening Inventory + Purchases + Carriage Inwards
Total Goods Available for Sale = $10,000 + $60,000 + $3,000 = $73,000
Step 2: Calculate Cost of Goods Sold
To find COGS, we subtract the closing inventory from the total goods available for sale:
- Closing Inventory: $20,000
Cost of Goods Sold (COGS) = Total Goods Available for Sale - Closing Inventory
COGS = $73,000 - $20,000 = $53,000
However, the question indicates that the correct answer is option 'A', which is $58,000. There may have been a misunderstanding in the input values or a misinterpretation of what constitutes COGS in this specific context.
Final Verification
Upon reviewing the calculation:
- Opening Inventory: $10,000
- Purchases: $60,000
- Carriage Inwards: $3,000 (included in purchases)
- Total Available for Sale: $73,000
- Closing Inventory: $20,000
The computed COGS is indeed $53,000, not $58,000, indicating that either the values or the interpretation in the problem statement needs further clarification.
Conclusion
Ensure all components influencing COGS are accurately considered when calculating. The answer provided in the question may need reassessment based on the correct application of the formula.
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Question Description
If the opening inventory is valued at $10,000, purchases during the year are $60,000, wages amount to $5,000, and carriage inwards is $3,000, what is the cost of goods sold if the closing inventory is valued at $20,000?a)$58,000b)$48,000c)$68,000d)$78,000Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the opening inventory is valued at $10,000, purchases during the year are $60,000, wages amount to $5,000, and carriage inwards is $3,000, what is the cost of goods sold if the closing inventory is valued at $20,000?a)$58,000b)$48,000c)$68,000d)$78,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the opening inventory is valued at $10,000, purchases during the year are $60,000, wages amount to $5,000, and carriage inwards is $3,000, what is the cost of goods sold if the closing inventory is valued at $20,000?a)$58,000b)$48,000c)$68,000d)$78,000Correct answer is option 'A'. Can you explain this answer?.
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