Chapter 8, Problem 8.3E

Determining cost of goods sold; periodic inventory system

• LO8–1

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	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, 2018, inventory balance is $40,000.

Required:

1. 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018.
2. 2. Prepare the year-end adjusting entry to record cost of goods sold.