Question

The following trial balance was taken from the books of Eaton Corporation on December 31, 20X6.

Account	Debit	Credit
Cash	$10,000
Accounts Receivable	40,000
Notes Receivable	7,000
Allowance for Doubtful Accounts		$0
Inventory, January 1, 20X6	51,000
Prepaid Insurance	4,800
Supplies	7,300
Furniture and Equipment	120,000
Accumulated Depreciation of F & E		15,000
Accounts Payable		10,800
Common Stock		44,000
Retained Earnings		65,000
Sales		290,000
Purchases	131,000
Purchase Returns		11,300
Salaries Expense	50,000
Rent Expense	15,000
Totals	$436,100	$436,100

At year- end, adjusting entries need to be recorded for the following:

Inventory at December 31, $64,500 (periodic inventory procedures).

From how I understand it the entry should look like a debit to Inventory (ending), Purchase Returns & allowances and Cost of Goods Sold and a credit to Purchases and Inventory. But it is not balancing and I cannot figure out where I am going wrong or if I'm missing something. here's what I have:

Inventory (ending)                          64,500

                Purchase Expense                           131,000

Cost of goods Sold                         117,500

Returns                                           11,300

                Inventory (beginning) 51,000

Cost of goods sold was found via: 51,000 + 131,000 – 64,500 = $117,500

Answer 1

Date	Account Titles	Debit	Credit
		$	$
Dec 31, 20X6	Inventory ( Ending )	64,500
	Cost of Goods Sold	106,200
	Purchase Returns	11,300
	Purchases		131,000
	Inventory ( Beginning )		51,000

Cost of Goods Sold = Beginning Inventory + Net Purchases - Ending Inventory = 51,000 + ( 131,000 - 11,300) - 64,500 = $ 106,200