The question tells the sales for August are $728,000 cost of sales must be $560,000 and purchases must be opening inventory = ($560,000/1.3 x 0.25)= $140,000
Closing inventory= ($624,000/1.3 x 0.25)= $120,000
Purchases for August= COGS - opening + closing
Purchaes= $560,000 - $140,000 + $120,000= $540,000
Total Cost incurred for August sales(not purchases) however is $560,000.
------------------------------
Syed Muhammad Wasiq Saleem
None
Karachi
Pakistan
------------------------------
Original Message:
Sent: 10-18-2019 08:24 AM
From: Alisha Moll
Subject: CMA P1
I'm getting $540,000. Why $560,000? You should subtract the amount purchase in July for August ($140,000) and add the amount you need to purchase in August for September $120,000. Why is it not then $560,000 - $140,000 + $120,000. Anyone?
------------------------------
Alisha Moll
Analyst
Hamler OH
United States
Original Message:
Sent: 10-10-2019 10:33 AM
From: Moataz Mohamed
Subject: CMA P1
------------------------------
Moataz Mohamed CPA
Accountant
------------------------------