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STEP 4: Cost of Goods Sold and Periodic Inventory

Instructions

XYZcom, being a startup, had a zero beginning inventory. The company spent $425,000 on inventory items, receiving $12,000 for prompt payment and paying $10,000 for freight. The closing inventory is $84,000.

Determine the cost of goods sold and the closing entries for a periodic inventory. Determine the cost of goods sold and the closing entries for XYZcom's periodic inventory system and prepare the Periodic Inventory.

Hint

Review the learning material in Part 2 pages 21 and 22. Then complete the tables.

Periodic Inventory - Calculate the Cost of Goods Sold

			$	Debit	Credit
	Less:
	Plus:
	Less:
Cost of Goods Sold

Periodic Inventory: Closing Entry

Account	Debit	Credit

Evidence Required

• Cost of goods sold (COGS) calculation
• Periodic Inventory Closing Entry
• Two completed tables