e Problems for Exam 26 Help Save Exercise 8-3 Determining cost of goods sold; pe

ID: 2391673 • Letter: E

Question

e Problems for Exam 26 Help Save Exercise 8-3 Determining cost of goods sold; periodic inventory system [LO8-1) Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information Nerchandise inventory 7/1/17 Sales Sales returns Purchases 3,400 394,000 13,400 254,000 7,400 11,400 Purchase discounts Purchase returns Freight-in 19,800 In addition, you determine that the June 30, 2018, inventory balance is $41,400. Required 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold. Complete this question by entering your answers in the tabs below. Reguired 1 Required 2

Explanation / Answer

Requirement (1) – Cost of goods sold for Askew company for the year ending June 30, 2018

Cost of goods sold = Beginning Inventory + [ Purchases – Purchase discounts – Purchase return] + Fright-in – Ending Inventory

= $33,400 + [254,000 – 7,400 – 11,400] + 19,800 – 41,400

= $247,000

“Cost of goods sold for Askew company = $247,000”

Requirement (2) – Year End Adjusting entry to record cost of goods sold

Accounts Tittles and Explanations

Debit ($)

Credit ($)

Cost of goods Sold A/c

247,000

Ending Inventory A/c

41,400

Purchase Discounts A/c

7,400

Purchase Returns A/c

11,400

To Beginning Inventory A/c

33,400

To Purchases A/c

254,000

To Fright-In

19,800