Inferring Purchases Using Cost of Goods Sold and Inventory Balances Penno Company reported ending inventories of $188,480 in 2017 and $206,320 in 2016. Cost of goods sold totaled $1,142,320 in 2017. a. Prepare the journal entry to record cost of goods sold. Description Credit Debit . Set up a T-account for inventory and post the cost of goods sold entry from part a. to this account. Inventory Balance a. C. Balance 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 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 Revenues Expenses Net Income Capital a