Question

During fiscal 2016, Caleres Inc. (formerly Brown Shoe Company), reported cost of goods sold of $1,517.4 million. Inventory at the start of the year was $546.7 million and at the end of the year was $585.8 million.

Which of the following describes the closing entry that the company will make for these accounts?

Select one:

A. Debit Inventory $39.1 million

B. Credit Inventory $585.8 million

C. Credit Cost of goods sold $1,517.4 million

D. Both A and C

E. None of the above

Answer 1

Answer is

C. Credit Cost of goods sold $1,517.4 million

Journal Entry

Income Summary               DR $1,517.4 million

Cost of goods sold              CR                              $1,517.4 million