A company uses the periodic inventory system. At the beginning of the year, inventory was \(\$10,000\). During the year, purchases amounted to \(\$25,000\). At year-end, the physical count shows ending inventory of \(\$8,000\). What is the Cost of Goods Sold (COGS) for the year?

• A. \(\$35,000\)
• B. \(\$17,000\)
• C. \(\$27,000\)
• D. \(\$23,000\)

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the formula for Cost of Goods Sold (COGS) under the periodic inventory system. The formula is: \( \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} \).
2. Step 2: Identify the values provided in the problem. Beginning Inventory is \( \$10,000 \), Purchases are \( \$25,000 \), and Ending Inventory is \( \$8,000 \).
3. Step 3: Substitute the values into the formula. This gives: \( \text{COGS} = \$10,000 + \$25,000 - \$8,000 \).
4. Step 4: Perform the addition first: \( \$10,000 + \$25,000 \). Then subtract \( \$8,000 \) from the result.
5. Step 5: The final value obtained after performing the calculations will be the Cost of Goods Sold (COGS) for the year.