In 2013, D ezto.mheducation.com/hm.tpx M6-7 Recording Journal Entries for Purcha

Question

In 2013, D ezto.mheducation.com/hm.tpx M6-7 Recording Journal Entries for Purchases and Sales Using a Perpetual Inventory System [LO 6-3,LO 6-5 (The following information applies to the questions displayed below Inventory at the beginning of the year cost $14,300 During the year, the company purchased (on account) inventory costing $88,500. Inventory that had cost $84,500 was sold on account for $98,600 At the end of the year, inventory was counted and its cost was determined to be $18,300 References M6-7 Recording Journal Entries for Purchases and Sales Using a Perpetual Inventory System [LO 6-3, LO 6-5) Section Break 1.42 points M6-7 Part a & b a. Show the cost of goods sold equation using these numbers

Explanation / Answer

a) Cost of goods sold equation :

b) Gross profit = 98600-84500 = 14100

c) Journal entry :

Beginning inventory 14300 Purchase 88500 Cost of goods available for sale 102800 Less: Ending inventory -18300 Cost of goods sold 84500

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