[cso23]

Hey guys, have the following problem. How to calculate COGS if not provided. Thanks.

The following information was taken from Baxter Department Store’s financial statements:
Inventory on January 1 $ 100,000
Inventory on December 31 300,000
Net sales 2,000,000
Net purchases 700,000
What was Baxter’s inventory turnover for the year ending December 31?

[Anonymous]

I'm still studying for FAR, so I hope I get this right…

COGS= Beg Inv+Purchases-Ending Inv
100,000+700,000-300,000=500,000

Inventory Turnover = COGS/Avg Inventory
500,000/[(100,000+300,000)/2]
500,000/200,000= 2.5

Is this correct?

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[cso23]

@Born to Win – that is the correct answer. Thanks! Good luck with your studies.

[Q]

Hi COGS formula:

Beg. Inventory
+ Purchases
– End. inventory
= COGS

[Author]

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