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

Question

Askew Company uses a periodic inventory system. The June 30,2018, year-end trial balance for the company contained the followi information Debit Credit 32, 400 Account Merchandise inventory, 7/1/17 Sales Sales returns Purchases Purchase discounts Purchase returns Freight-in 384 , 000 12,400 244, 000 6, 400 10, 400 17,800 In addition, you determine that the June 30, 2018, inventory balance is $40,400 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

Explanation / Answer

1 Beginning inventory 32400 Purchases 244000 Freight -in 17800 Purchase returns -10400 Purchase discounts -6400 Cost of goods available for sale 277400 Less: Ending Inventory 40400 Cost of goods sold 237000 2 Cost of goods sold 237000 Inventory ending 40400 Purchase returns 10400 Purchase discounts 6400         Inventory beginning 32400         Purchases 244000         Freight -in 17800

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