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KonstantinChe [14]

3 years ago

6

Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the followin

g information: Account Debit Credit Merchandise inventory, 7/1/17 33,000 Sales 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, 2018, inventory balance is $41,000. Required: 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold.

1 answer:

Taya2010 [7]3 years ago

3 0

Answer:

Askew Company

1. Cost of goods sold $243,000

2. Adjusting Journal Entries:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

Explanation:

a) Data and Calculations:

Account Debit Credit

Merchandise inventory, 7/1/17 33,000

Sales 390,000

Sales returns 13,000

Purchases 250,000

Purchase discounts 7,000

Purchase returns 11,000

Freight-in 19,000

Merchandise inventory, 7/1/17 $33,000

Purchases 250,000

Purchase discounts (7,000)

Purchase returns (11,000)

Freight-in 19,000

Cost of goods available for sale $284,000

June 30, 2018, inventory balance $41,000

Cost of goods sold $243,000

Adjusting Entry:

Debit Cost of Goods Sold $243,000

Debit Purchases discounts $7,000

Credit Freight-in $19,000

Credit Inventory $231,000

To record the cost of goods sold.

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Answer:

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Date Account Titles Debit Credit

Dec. 1 Beginning balance $60,000

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Date Account Titles Debit Credit

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a) Data and Analysis:

a. Inventory $230,000 Accounts payable $230,000

b. Salaries expense $57,000 Cash $57,000

c. Accounts receivable $154,000 Sales revenue $154,000

d. Cash $365,000 Accounts receivable $265,000

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Opening balances:

Cash $73,500

Accounts receivable $60,000

Accounts payable $39,000

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Explanation:

Given

$U(S,T) = 2ST$

$M_U_S =2T$

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The following details are omitted from the question

$P_S= \$50$ --- Price of the Shoes

$P_T = \$50$ --- Spent on dancing

$B = \$500$ --- Budget on shoe and dancing

Solving (a): Her budget line

First, we determine her budget equation (B).

This is calculated by:

$B = P_S * S + P_T *T$

This gives:

$500 = 50 * S + 50 * T$

$500 = 50 S + 50 T$

Divide through by 50

$10 =S + T$

$S + T = 10$ --- The budget equation

<em>See attachment for the budget line equation</em>

Solving (a): Optimal Consumption Bundle Point

First, we determine the marginal rate of substitution (MRS) using:

$MRS = \frac{MU_s}{MU_t} = 1$

$MRS = \frac{2S}{2T} =1$

This implies that:

$\frac{2S}{2T} = 1$

Cross Multiply

$2S = 2T * 1$

$2S = 2T$

Divide by 2

$S = T$

Substitute T for S in the budget equation

$T + T= 10$

$2T = 10$

$T=5$

Recall that:

$S = T$

$S = 5$

So, the point if optimal consumption bundle is (5,5)

<em>See attachment for point R</em>

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