A company started the year with \$10,000 in inventory, purchased \$25,000 of additional inventory during the year, and ended the year with \$8,000 in inventory. Using a single-step income statement, what is the company's cost of goods sold (COGS) for the year?

• A. \$33,000
• B. \$23,000
• C. \$35,000
• D. \$27,000

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the formula for calculating Cost of Goods Sold (COGS). 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. \( \text{COGS} = 10,000 + 25,000 - 8,000 \).
4. Step 4: Perform the addition and subtraction operations in the formula. First, add Beginning Inventory and Purchases, then subtract Ending Inventory.
5. Step 5: The result from the calculation will give you the company's Cost of Goods Sold (COGS) for the year.