How to Calculate Beginning Inventory Cost - Tutorial

How to Calculate BI Cost - Definition, Formula, Example

Definition:

Beginning inventory denotes a company's good value which it has for its sale during the starting of an inventory accounting period.

Formula:

Beginning inventory = Cost of goods sold - Purchases + Ending inventory

Example :

A company sold its good for $10000 and purchased new inventory for $5000. Ending inventory balance was $20000. Calculate the Beginning Inventory cost of that product.

Given,

Cost of goods sold = $10000 Purchases = $5000 Ending inventory = $20000

To Find,

BI Cost

Solution:

Beginning inventory = Cost of goods sold - Purchases + Ending inventory = 10000 - 5000 + 20000 = 5000 + 20000 = $25000

Related Calculator


english Calculators and Converters


Sitemap