Question

The June 30, 2021, year-end trial balance for Askew company contained the following information:

Account Debit Credit
Inventory, 7/1/2020 32,400
Sales revenue 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, 2021, inventory balance is $41,000.
Required:
Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2021.

Answer 1

Answer: $242,400

Step-by-step explanation:

The Costs of goods sold can be calculated as follows:

= Beginning inventory + Net Purchases + Freight-in - Ending inventory

= Beginning inventory + (Purchases - Purchase discounts - Purchases returns) + Freight-in - Ending inventory

= 32,400 + (250,000 - 7,000 - 11,000) + 19,000 - 41,000

= $242,400