Smith Inc. uses the periodic inventory system. Its purchases for the most recent year were $83,000, ending inventory was $21,000, and the cost of goods sold was $122,000. How much inventory was in stock at the beginning of the year? A :

$60,000

Explanation:

under the periodic inventory system, cost of goods sold(COGS) is calculated by the formula  given below

COGS = BEGINNING INVENTORY(BI) + cost of goods purchased(COGP) - ENDING INVENTORY (EI)

BI=COGS-COGP+EI

Given in the problem

COGS=122000

COGP=83000

EI=21000

122,000 - 83000 + 21000 = $60,000(EI)

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