1. Here are several T-account balances that the Absalom Company has in its ledger at the end of the current year before a physical inventory count is to be taken.

   Figure 8.16

   

   1. What was the amount of goods available for sale for this company?

   2. If the company counts its ending inventory and finds merchandise costing $84,000, what should be reported as cost of goods sold for the year?

   3. What adjusting entry should Absalom make at the end of the current year to record cost of goods sold and ending inventory?

Advertising expense $22,000 46,000 Rent expense Purchases of inventory Sales 332,000 696,000 77,000 Inventory, January 1 Transportation-in 8,000 Purchase Discounts 14,000 $22,000 Advertising expense Rent expense Purchases of inventory 46,000 332,000 Sales 696,000 77,000 Inventory, January 1 Transportation-in 8,000 Purchase Discounts 14,000