Assuming That Net Cost of Purchases Was $39,000 During the Year

question 150

Multiple Choice

Assuming that net cost of purchases was $39,000 during the year and that ending merchandise inventory was $1,000 less than the beginning merchandise inventory of $12,500,how much was cost of goods sold?

• A)$50,500
• B)$52,500
• C)$40,000
• D)$38,000

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Definitions:

Deferred Tax Liability

A tax obligation due in the future for income that has been recognized in the financial statements before it is taxable by tax authorities.

Tax Depreciation

The depreciation expense deducted for tax purposes, allowing taxpayers to recover the cost of a property or asset used in a trade or business for income-producing purposes.

Accounting Depreciation

Represents the systematic allocation of the depreciable amount of an asset over its useful life, reflecting the wear and tear, obsolescence, or other declines in value as an expense in the income statement.

Company Tax Rate

The rate at which a corporation's income is taxed by the government.