Problem 3-4 (Algorithmic)

Inventories (LO 3.2)

Kevin owns a retail store, and during the current year he purchased $777,400 worth of inventory. Kevin's beginning inventory was $77,740, and his ending inventory is $93,288. During the year, Kevin withdrew $15,548 in inventory for his personal use. Assume that he uses the cost method to value the inventory and there was no change in determining quantities, costs, or valuations between opening and closing inventory.

Use Part III of Schedule C below to calculate Kevin's cost of goods sold for the year.

Enter all amounts as positive numbers.

Part IIICost of Goods Sold(see instructions)33Method(s) used tovalue closing inventory:

34Was there any change in determining quantities, costs, or valuations between opening and closing inventory?If "Yes," attach explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35Inventory at beginning of year. If different from last year's closing inventory, attach explanation . . . .3536Purchases less cost of items withdrawn for personal use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3637Cost of labor. Do not include any amounts paid to yourself. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3738Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3839Other costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3940Add lines 35 through 39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4041Inventory at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4142Cost of goods sold.Subtract line 41 from line 40. Enter the result here and on line 4 . . . . . . . .42