### Honest Tea, Inc. - Inventory Balance Calculation**Scenario Overview:**Honest Tea, Inc. is a merchandiser. The following financial details are provided to determine the inventory balance on the December 31 year-end balance sheet. Note that all purchases of inventory are on account.**Given Information:**| **Description** | **Amount** ||-------------------------------------------------|--------------|| Cost of Goods Sold during the year | $34,000 || January 1 Inventory | $10,000 || Sales during the year | $77,000 || December 31 Accounts Receivable | $24,000 || Purchases of Inventory on Account during the year | $35,000 || December 31 Inventory | $______ |**How to Calculate the December 31 Inventory:**1. **Start with the Beginning Inventory (January 1):** This is the inventory amount at the beginning of the year.2. **Add Purchases of Inventory:** This includes all purchases made during the year.3. **Subtract Cost of Goods Sold:** This represents the cost associated with the goods that were sold during the year.**Formula:**\[ \text{December 31 Inventory} = \text{January 1 Inventory} + \text{Purchases of Inventory} - \text{Cost of Goods Sold} \]**Calculation Steps:**1. Beginning Inventory (January 1): $10,0002. Add Purchases during the year: $35,0003. Subtotal: $10,000 + $35,000 = $45,0004. Subtract Cost of Goods Sold: $45,000 - $34,000 = $11,000**Conclusion:**The December 31 Inventory for Honest Tea, Inc. is **$11,000**.

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Description: ### Honest Tea, Inc. - Inventory Balance Calculation**Scenario Overview:**Honest Tea, Inc. is a merchandiser. The following financial details are provided to determine the inventory balance on the December 31 year-end balance sheet. Note that all pu

Cost of goods sold (COGS) : Cost of goods sold budget shows the expenses incurred for producing a…

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Honest Tea, Inc. is a merchandiser. Use the following information to its Inventory balance on its December 31 year-end balance sheet. Note: All purchases of inventory are on account. Cost of Goods Sold during the year January 1 Inventory Sales during the year December 31 Accounts Receivable Purchases of Inventory on Account during the year December 31 Inventory = $. $34,000 10,000 77,000 24,000 35,000

Honest Tea, Inc. is a merchandiser. Use the following information to its Inventory balance on its December 31 year-end balance sheet. Note: All purchases of inventory are on account. Cost of Goods Sold during the year January 1 Inventory Sales during the year December 31 Accounts Receivable Purchases of Inventory on Account during the year December 31 Inventory = $. $34,000 10,000 77,000 24,000 35,000

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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