Exercise 8-3 (Algo) Determining cost of goods sold [LO8-1] The June 30, 2021, year-end trial balance for Askew company contained the following information: Account Debit Credit Inventory, 7/1/2020 33,500 Sales revenue 395,000 Sales returns 13,500 Purchases 255,000 Purchase discounts 7,500 Purchase returns 11,500 Freight-in 20,000 In addition, you determine that the June 30, 2021, inventory balance is $41,500. Required: Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2021.

Cost of Goods Sold $ 248,000

Explanation:

Askew Company

The Cost of Goods Sold  Statement

for the year ending June 30, 2021.

Inventory, 7/1/2020              33,500

Add  Purchases 255,000

Less Purchase returns 11,500

Less Purchase Discounts 7,500

Net Purchases 269,500

Add Freight In $ 20,000

Cost of goods Purchased  289,500

Less Ending Inventory balance  $41,500.

Cost of Goods Sold $ 248,000

Working

Askew Company

Account                                 Debit                  Credit

Inventory, 7/1/2020              33,500

Sales revenue                                                395,000

Sales returns 13,500

Purchases 255,000

Purchase discounts 7,500

Purchase returns 11,500

Freight-in 20,000

Inventory balance 6/30/2021 $41,500.

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