Question

Super Tread Inc. is a large manufacturer of auto tires. Super Tread has provided the following information:

Sales Revenue $55,000
Beginning Finished Goods Inventory 15,500
Cost of Goods Sold 37,500
Cost of Goods Manufactured 44,500

Calculate the amount of ending Finished Goods Inventory reported on Super Tread's balance sheet.

Answer 1

Answer:

Ending Inventory of finished goods = $22,500

Explanation:

The question is to determine SuperTread's Ending/Closing Inventory of Goods to be reported in the Balance Sheet

First, based on the information give, we work back from the Cost of goods sold until we are able to identify or compute the Ending finished goods.

Formula for Cost of Goods sold = Cost of Manufactured Goods+ Opening Inventory of Finished Goods - the closing inventory of finished goods

Based on the information we compute as follows

$37,500 = $44,500 + $15,5000 - The Closing inventory of finished goods

Therefore, the closing Inventory of finished goods

= $44,500+ $15,500 - $37,500

= $22,500