Question

The june 30, 2024, year-end trial balance for askew company contained the following information

Account Debit Credit
Inventory, 7/1/2023 32,600
Sales revenue 380,000
Sales returns 12,000
Purchases 240,000
Purchase discounts 6,000
Purchase returns 10,000
Freight-in 17,000


required: calculate the cost of goods sold for the askew company for the year ending june 30, 2024.

Answer 1

The cost of goods sold for Askew Company is calculated by adjusting the beginning inventory with the net purchases and freight-in. Without the ending inventory, the merchandise available for sale as of June 30, 2024, is $273,600.

Step-by-step explanation:

To calculate the Cost of Goods Sold (COGS) for Askew Company for the year ending June 30, 2024, we start with the company's beginning inventory and add all purchases made during the year after accounting for discounts and returns. Then, we add the freight-in costs, which are the costs associated with bringing inventory to the business premises. Finally, we subtract the ending inventory from this total (not provided in this case, but typically subtracted if known) to determine the COGS.

The beginning inventory on July 1, 2023, was $32,600. Adding the total purchases which are $240,000, we have a subtotal of $272,600. Now, we deduct purchase discounts of $6,000 and purchase returns of $10,000, bringing the total purchases down to $224,000 ($240,000 - $6,000 - $10,000). Adding this to the beginning inventory gives us $256,600 ($32,600 + $224,000). Then, we include the freight-in costs of $17,000 to this sum, giving us a final total of $273,600. This figure represents the total merchandise available for sale during the year.

Without the ending inventory figure, we can't calculate the exact COGS. However, with the provided data, the total merchandise available for sale till June 30, 2024, is $273,600. If the ending inventory were provided, we would deduct it from this total to arrive at the COGS. Since the ending inventory is not given, we have provided the calculation up to the available information point.

Answer 2

To calculate the cost of goods sold for Askew Company, we summarize the accounts involved in COGS calculation and adjust them using a standard formula. Without the value of the Ending Inventory, we can only compute the Cost of Goods Available for Sale.

Step-by-step explanation:

The calculation of the cost of goods sold (COGS) for Askew Company for the year ending June 30, 2024, involves summarizing various accounts from the trial balance and adjusting them accordingly. The formula to calculate COGS is as follows:

• Beginning Inventory
• Plus: Purchases
• Less: Purchase Discounts
• Less: Purchase Returns
• Plus: Freight-In
• Equals: Cost of Goods Available for Sale
• Less: Ending Inventory
• Equals: Cost of Goods Sold

According to the trial balance provided:

1. Beginning Inventory: $32,600
2. Purchases: $240,000
3. Purchase Discounts: $6,000
4. Purchase Returns: $10,000
5. Freight-In: $17,000

To find the COGS:

1. Add the Beginning Inventory to Purchases, which equals $272,600 ($32,600 + $240,000).
2. Subtract Purchase Discounts and Purchase Returns from this total, which equals $256,600 ($272,600 - $6,000 - $10,000).
3. Add Freight-In to this total to determine the Cost of Goods Available for Sale, which equals $273,600 ($256,600 + $17,000).
4. Assuming there is no information given about the Ending Inventory, it would need to be subtracted from the Cost of Goods Available for Sale to find the final COGS. As this information is not provided, we can only calculate the Cost of Goods Available for Sale.

Therefore, without the value of the Ending Inventory, we cannot determine the exact COGS, but only the Cost of Goods Available for Sale for the Askew Company.