Question

) Presented below is information related to Chesterton Corp for the year ended

    December 31, 2019.

Purchases	$200,000
Purchase discounts	3,000
Purchase returns & allowances	6,000
Sales revenue	312,000
Sales discounts	8,000
Sales returns & allowances	13,000
Freight-in	10,000
Freight-out	5,000
Inventory, January 1, 2019	42,000
Inventory, Dec. 31, 2019	63,000

Instructions:

Prepare a partial income statement through gross profit, including a detailed cost of goods sold section assuming that Chesterton uses a periodic inventory system.

Record the entry adjust inventory and close the temporary cost of goods sold accounts.

Date		Debit	Credit

Answer 1

Income statement

Sales revenue		312,000
Sales discounts		- 8,000
Sales returns & allowances		- 13,000
Net sales revenue			291,000
Cost of goods sold:
Inventory, January 1, 2019		42,000
Purchases	200,000
Purchase discounts	- 3,000
Purchase returns & allowances	- 6,000
Net purhcases		191,000
Freight-in		10,000
Cost of goods available for sale		243,000
Inventory, Dec. 31, 2019		- 63,000
Cost of goods sold			- 180,000
Gross profit			$111,000

Journal

December 31, 2019	Income summary	180,000
	Cost of goods sold		180,000

answered by: anonymous