Askew Company uses a periodic inventory system. The June 30, 2018, year-end tria

Question

Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information:

In addition, you determine that the June 30, 2018, inventory balance is $40,300.

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.

Account Debit Credit Merchandise inventory, 7/1/17 32,300 Sales 383,000 Sales returns 12,300 Purchases 243,000 Purchase discounts 6,300 Purchase returns 10,300 Freight-in 17,600

Explanation / Answer

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.

Beginning inventory 32300 Purchase 243000 Less: Purchase discount (6300) Less: Purchase returns (10300) Add: Freight in 17600 Net purchase 244000 Cost of goods available for sale 276300 Less: Ending inventory (40300) Cost of goods sold 236000

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