Can someone please take a look at my example and help explain how to calculate the balance of "Merchandise Inventory"?

Thanks



Keith

Are you talking about COG (cost of goods) sold?

If so, I believe you are looking for this formula:

Beginning Inventory + Purchases - Ending Inventory

Let me know if this helps.

Did you happen to look at the attachment file? On the very bottom it says "Calculate the balance in the Merchandise Inventory account as at July 31, 2012.". Is that the same as COG?

COGS stands for Cost of Goods of Sold and it is the Merchandise Inventory that was sold, so it is not part of the remaining Merchandise Inventory balance.