Problem: The following information was derived from the 2004 accounting records of Kelly:
Kelly's Goods
Kelly's Central Warehouse Held by Consignees
Beginning inventory $260,000 $ 28,000
Purchases 950,000 140,000
Freight-in 20,000
Transportation to consignees 10,000
Freight-out 60,000 16,000
Ending inventory 290,000 40,000
Kelly's 2004 cost of sales was
a. $940,000.
b. $1,000,000.
c. $1,068,000.
d. $1,078,000.