The inventory Equation helps here to determine how much of the purchases were used up to make sales from the truck. Calculate Category $ Amount Hint/explanation ADD Beginning inventory It's a brand new business. How much is On hand 1 second after he opens? ADD Purchases for the year SUBTRACT Ending inventory EQUALS Cost of Goods Sold 4. Write the Journal Entry and Post to the T-account Account Debit Credit Supplies inventory Cost of Goods Sold Record the amount of inventory sold by 3C