Working Backward: Cash PaymentsDirect Method

Homeier Heating reported the following amounts on its comparative balance sheets:

________________12/31/2016____12/31/15

Current Assests

Inventories $66,000 $55,000

Current Liabilities

Accounts Payable $33,000 $24,000

Assume all accounts payable transactions were for purchases of inventory.

The company uses the direct method on its statement of cash flows and reported that it spent $44,000 during 2016 to acquire inventory. Determine cost of goods sold expense for 2016.