Flaherty Company Had Beginning Inventory on May 1 of $12,000

question 201

Essay

Flaherty Company had beginning inventory on May 1 of $12,000. During the month, the company made purchases of $40,000 but returned $2,000 of goods because they were defective. At the end of the month, the inventory on hand was valued at $15,500.
Calculate cost of goods available for sale and cost of goods sold for the month.

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Definitions:

Promissory Note

A financial instrument that contains a written promise by one party to pay another a definite sum of money either on demand or at a specified future date.

Employer Cost

The total expense incurred by employers to compensate employees, including salaries, benefits, and taxes.

Interest Expense

The cost incurred by an entity for borrowing funds.

Contingent Liability

A potential obligation that may arise depending on the outcome of a future event, which is not yet certain to occur.