A company uses the perpetual inventory system. At the end of the period, the following information is available: Beginning Inventory = \$5,000\(, Purchases = \)12,000\(, Ending Inventory = \)4,000$. What is the Cost of Goods Sold (COGS) for the period?

• A. \$13,000$
• B. \$17,000$
• C. \$9,000$
• D. \$21,000$

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the formula for Cost of Goods Sold (COGS) under the perpetual 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: \( \text{Beginning Inventory} = \$5000 \), \( \text{Purchases} = \$12000 \), and \( \text{Ending Inventory} = \$4000 \).
3. Step 3: Substitute the values into the formula: \( \text{COGS} = \$5000 + \$12000 - \$4000 \).
4. Step 4: Perform the addition first: \( \$5000 + \$12000 \).
5. Step 5: Subtract \( \$4000 \) from the result of the addition to calculate the Cost of Goods Sold.