"26. Adjust for Inventory. The physical inventory count indicated there were the following inventory items on hand: a. If your first name starts with A-G; 65 duffles & 35 backpacks b. If your first name starts with H-O; 48 duffles & 32 backpacks c. If your first name starts with P-Z; 25 duffles & 34 backpacks *Remember: Threads uses a periodic FIFO inventory method *HINT: The first adjusting entry effectively gets the inventory account balance corrected, gets the purchase and purchase returns accounts down to zero, and calculates what COGS should be. The COGS value is a plug so you should not have that value until you know the others. You want to adjust merchandise inventory to get the old balance of inventory off the books as that was "sold" according to our FIFO method. You also want to separately adjust it (one will be a credit and the other a debit) to put the inventory value that should be reflected on the quarter ending balance sheet into the account. You then want to empty out the purchase and purchase return accounts. After all of this, the COGS value is just a plug of the other values listed so that your debits equal your credits. The first calculations/pieces of the entry identify everything we need to figure out what the COGS value should be."

The inventory layers at 3/31/19 were as follows:

oDuffels

45 duffles @ $150 each = $6,750 (first in)

72 duffles @ $130 each = $9,360

12 duffles @ $165 each = $1,980 (last in)

oBackpacks

92 backpacks @ $79 each = $7,268 (first in)

60 backpacks @ $75 each = $4,500

8 backpacks @ $100 each = $800

38 backpacks @ $70 each = $2,660 (last in)

Can anyone help me with this adjusting entry? like what accounts to use and how to go about doing it.

Thanks