Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information: Account Debit Credit Merchandise inventory, 7/1/17 33,000 Sales 390,000 Sales returns 13,000 Purchases 250,000 Purchase discounts 7,000 Purchase returns 11,000 Freight-in 19,000 In addition, you determine that the June 30, 2018, inventory balance is $41,000. 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.

Askew Company

1. Cost of goods sold                     $243,000

2. Adjusting Journal Entries:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

Explanation:

a) Data and Calculations:

Account                                       Debit    Credit

Merchandise inventory, 7/1/17 33,000

Sales                                                     390,000

Sales returns                            13,000

Purchases                             250,000

Purchase discounts                                7,000

Purchase returns                                   11,000

Freight-in                                19,000

Merchandise inventory, 7/1/17        $33,000

Purchases                                       250,000

Purchase discounts                           (7,000)

Purchase returns                              (11,000)

Freight-in                                           19,000

Cost of goods available for sale $284,000

June 30, 2018, inventory balance $41,000

Cost of goods sold                     $243,000

Adjusting Entry:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

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