compute for the unknown
please help me, i really don't underdstand this
CASE A
cost of goods manufactured 15,000
cost of good sold 25,000
finished goods invty. jan 1 22,500
finished good invty. dec 31 ?
thank you
To compute for the unknown, which is the finished goods inventory on December 31, we can use the following formula:
Finished Goods Inventory (December 31) = Finished Goods Inventory (January 1) + Cost of Goods Manufactured - Cost of Goods Sold
Let's plug in the given values into the formula:
Cost of Goods Manufactured = $15,000
Cost of Goods Sold = $25,000
Finished Goods Inventory (January 1) = $22,500
Finished Goods Inventory (December 31) = $22,500 + $15,000 - $25,000
To get the result, we calculate the sum on the right side of the formula:
Finished Goods Inventory (December 31) = $37,500 - $25,000
Finished Goods Inventory (December 31) = $12,500
Therefore, the finished goods inventory on December 31 is $12,500.