@IvanP wrote:
Now for 2020, I did not purchase any new inventory.
BOY = $5,350... the same amount with which I ended 2019.
COGS = $350 - the cost of the 25 t-shirts which I sold in 2020 (regardless of the fact that I paid for them in 2019).
Therefore my EOY should be $5,350-$350=$5,000. Am I correct?
The basic formula is the following (and it has never changed):
Beginning Inventory Plus Purchases Minus Ending Inventor Equals Cost of Goods Sold.
If you follow the other response in this thread, you are doing it backwards. You do not need to know your cost of goods sold in order to determine your ending inventory. You need to know your ending inventory in order to calculate your cost of goods sold.
Therefore, if your beginning inventory was $5,350, you purchased no new inventory during the year, and your ending inventory was $5,000, then your cost of goods sold was $350.
