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The formula for the Cost of Goods Sold (COGS) is:

Accounting

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2 parts
a

K 1220.00\text{K } 1220.00

b

K 2210.00\text{K } 2210.00

Step-by-step solution

4 steps

Here's how to find the cost of goods sold for both parts:

The formula for the Cost of Goods Sold (COGS) is:

COGS=Opening Stock+Purchases−Closing Stock\text{COGS} = \text{Opening Stock} + \text{Purchases} - \text{Closing Stock}

Part a· 2 steps

  1. Calculate total purchases.

    Total Purchases=Cash purchases+Credit purchases\text{Total Purchases} = \text{Cash purchases} + \text{Credit purchases} Total Purchases=K 500.00+K 820.00=K 1320.00\text{Total Purchases} = \text{K } 500.00 + \text{K } 820.00 = \text{K } 1320.00

  2. Calculate the Cost of Goods Sold.

    COGS=Stock at start+Total Purchases−Stock at end\text{COGS} = \text{Stock at start} + \text{Total Purchases} - \text{Stock at end} COGS=K 600.00+K 1320.00−K 700.00\text{COGS} = \text{K } 600.00 + \text{K } 1320.00 - \text{K } 700.00 COGS=K 1920.00−K 700.00\text{COGS} = \text{K } 1920.00 - \text{K } 700.00 COGS=K 1220.00\text{COGS} = \boxed{\text{K } 1220.00}

Part b

K 2210.00\text{K } 2210.00

  1. Calculate total purchases.

    Total Purchases=Cash purchases+Credit purchases\text{Total Purchases} = \text{Cash purchases} + \text{Credit purchases} Total Purchases=K 1300.00+K 1000.00=K 2300.00\text{Total Purchases} = \text{K } 1300.00 + \text{K } 1000.00 = \text{K } 2300.00

    The "Refund inward" is a sales return and is not relevant for calculating the Cost of Goods Sold.

  2. Calculate the Cost of Goods Sold.

    COGS=Stock at start+Total Purchases−Stock at end\text{COGS} = \text{Stock at start} + \text{Total Purchases} - \text{Stock at end} COGS=K 900.00+K 2300.00−K 990.00\text{COGS} = \text{K } 900.00 + \text{K } 2300.00 - \text{K } 990.00 COGS=K 3200.00−K 990.00\text{COGS} = \text{K } 3200.00 - \text{K } 990.00 COGS=K 2210.00\text{COGS} = \boxed{\text{K } 2210.00}
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