Determining cost of goods sold; periodic inventory system
Response to the following problem:
Askew Company uses a periodic inventory system. The June 30, 2016, year-end trial balance for the company contained the following information:
|
Account
|
Debit
|
Credit
|
|
Merchandise inventory, 7/1/15
|
32,000
|
|
|
Sales
|
|
380,000
|
|
Sales returns
|
12,000
|
|
|
Purchases
|
240,000
|
|
|
Purchase discounts
|
|
6,000
|
|
Purchase returns
|
|
10,000
|
|
Freight-in
|
17,000
|
|
In addition, you determine that the June 30, 2016, inventory balance is $40,000
Required:
1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2016.
2. Prepare the year-end adjusting entry to record cost of goods sold.