Problem - Absalom Company
Here are several T-account balances that the Absalom Company has in its ledger at the end of the current year before a physical inventory count is to be taken.
Advertising expense - $22,000
Rent expense - 46,000
Purchases of inventory - 332,000
Sales - 696,000
Inventory, January 1 - 77,000
Transportation-in - 8,000
Purchase Discount - 14,000
a. What was the amount of goods available for sale for this company?
b. If the company counts its ending inventory and finds merchandise costing $84,000, what should be reported as cost of goods sold for the year?
c. What adjusting entry should Absalom make at the end of the current year to record cost of goods sold and ending inventory?