Explore BrainMass

Inventory - Cost of Sales

The following information was derived from the 2004 accounting records of Kelly:
Kelly's Goods
Kelly's Central Warehouse Held by Consignees
Beginning inventory $260,000 $ 28,000
Purchases 950,000 140,000
Freight-in 20,000
Transportation to consignees 10,000
Freight-out 60,000 16,000
Ending inventory 290,000 40,000
Kelly's 2004 cost of sales was
a. $940,000.
b. $1,000,000.
c. $1,068,000.
d. $1,078,000.

Solution Preview

The inventory held by consignees will be in teh books of Kelly and would be added to the kelly inventory. Also all freight incurred in getting the goods either ...

Solution Summary

The solution explains how to calculate the cost of sales.