Inferring Purchases Using Cost of Goods Sold and Inventory Balances

Penno Company reported ending inventories of $4,712,000 in 2017 and $5,158,000 in 2016. Cost of goods sold totaled $28,558,000 in 2017, Prepare the journal entry to record cost of goods sold. Description Debit Credit Cost of Good Sold 28,558,000 0 Inventory 28,550.000 a b. Set up a T-account for inventory and post the cost of goods sold entry from part a. to this account. Inventory Balance 5,158,DOU a. 28,558,000 X 0X 0 x 29,004,000 X Balance 4,712,000 c. Using the T-account from b, determine the amount of inventory that was purchased in 2017. Prepare a journal entry to record those purchases. Assume the inventory was purchased using cash. Description Debit Credit Inventory $ x 29,004.000 x 0 Cash 0 29,004,000 x d. Using the financial statement effects template, show the effects of the entries in parts a and con the balance sheet and income statement. Note: Use negative signs with your answers, when appropriate. Balance Sheet Income Statement Noncash Contrib. Earned Transaction Cash Asset + Asset Liabilities Capital + Capital Revenues Expenses Net Income O + (28,558,000) = 0 0 + OX 0 * = 128.558,000) (29,004,000) X + * 29,004,000 x = 0+ 0 + C 0 0 = +