How to create a schedule of cost of goods sold?

Question

Here's my guess:

Beginning Inventory

Purchases

Goods available for sale

Less: Ending inventory

Cost of goods sold

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But here is the additional info given:

Cash

Accounts Receivable

Building

Accumulated Depreciation

Inventory

Supplies

Contributed Capital

Distributions

Purchases

Salaries Expense

Inventory (January 1, 2008)

Operating Expense

Salaries Payable

Retained Earnings

Freight-in

Sales

Accounts Payable

Depreciation Expense

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I was thinking "freight-in" would be included somewhere in the Schedule of cost of goods sold...?

Answer 1

Freight-In is a part of COGS. It is usually included in Purchase amount but you can also break it out if you want to track it. It would go under purchases. Freight-Out is a Selling expense. Your list of accounts is out of proper sequence, put it in the correct order and you may be better able to see what goes where. You also have the Income Statement - mixed in - with the Balance Sheet - a definite no no.