For the month ending December 31, MidState Machinery had gross sales of $4,207,000, returns of $68,800, cost of beginning inventory $502,000, cost of purchases $1,484,000, cost of ending inventory $570,000, total operating expenses $135,900.
Thank you very much for your guidance. I was able to achieve the same result for the net sales, however I am confused with the cost of good sold. The potential answers that we were given are: $1,416,000 $135,900 and $2,716,300. I have worked this problem several times and cannot come up with any of those numbers (other than going with the total operating expenses. Can you please clarify? Thank you.
Ok, thank you. The actual cost for the closing inventory was $570,000. So, when I replaced the $135,900 and used your formula, I came up with $1,416,000 which makes sense. Thank you, again and have a great day.