Ask Experts Questions for FREE Help !
    vmop30's Avatar
    vmop30 Posts: 9, Reputation: 1
    New Member

    Jan 27, 2007, 03:25 PM
    Cost of Goods Sold
    I need help with the following question:

    The following information is available for Ace Company for 2007:

    Disbursements for purchases

    Increase in trade accounts payable

    Decrease in merchandise inventory

    Costs of goods sold for 2007 was:

    I'm not sure how to get the CofGS with the info provided.
    adiwsusanto's Avatar
    adiwsusanto Posts: 5, Reputation: 1
    New Member

    Mar 12, 2008, 03:06 AM
    You need to understand the relation between AP, inventory and COGS. Draw a T a/c of AP & inventory. With limited info, you have to assume on the BALANCES.

    1. Disbursement of 1,050

    2. Increase in AP (assume that it's for purchase of inventory, so it's a similar entry)

    3. Decrease in Inventory (assume that it's for Sales of inventory)

    with no balance info, I assume that there is no beginning/ ending balance. As such, your inventory T a/c will shows 0 beginning balance, Dr of 75 + 1050, Cr of 30. 0 ending balance. To balance thing you will need another Cr of 1095. With the 30 COGS have been booked, your total COGS then is 30 + 1095 = 1125

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

Posting Costs Of Goods Sold [ 2 Answers ]

Why is it inappopriate to post goods puchased at the time of purchase instead of the time actually sold??

Net sales-cost of goods sold= [ 2 Answers ]

What is the net sales minus cost of goods sold?

Cost of goods sold for software [ 0 Answers ]

I have developed a small software application to sell to my customers. How do I determine the cost of goods sold per unit if I don't know how many units I might sell. For example: if my development cost was $1000 and I sold two units for $10.00 each, I know I had $20.00 in sales but for accounting...

View more questions Search