25 26 Special Adjusting Entry for Cost of Goods Sold/Merchandise Inventory: 27 28 Before year-end adjustments, the Inventory and Cost of Goods Sold/Gross Profit Accounts 29 had the following balances: 30 31 32 Inventory 33 34 Cost of Goods Sold Year-End Balances 80,000.00 0.00 35 Purchases 350,000.00 Cost of Goods Sold Calculation: Beg. Inventory + Net Purchases 36 Purchases returns and allowances 5,950.00 = Goods Available for Sale 37 Purchases discounts 5,250.00 - End. Inventory 7,000.00 = Cost of Goods Sold 38 Freight-in 39 40 41 A Physical count of inventory at year-end shows of inventory on hand. $ 93,500 42 J. Prepare the adjusting entry to establish the correct inventory balance, cost of goods sold amount, and close other supplemental accounts from list above. 43 44 45 Date/Ref. 46 47 48 Description Debit Credit