ACCY 202 1st Edition Discussion -Lecture 5 Outline of Last LectureI. FOB Shipping Point- Freight Prepaid1. Date of Recording2. Shipping CostsII. Journal Entries1. Balance Sheet and Income StatementIII. Cash Payment1. Gross method2. Purchase DiscountOutline of Current LectureI. Recap of Collection 1II. How to Calculate Beginning Inventory1. Inventory T account2. Solve for BEi. Example from Collection #1III. How to Calculate Ending Inventory1. Solve for EIi. Example from Collection #1IV. How to Calculate Cost of Goods Sold1. Solve for COGSi. Example from Collection #1Current LectureI. Recap of Collection 1- Pay attention to the date of journal entry! It is only when the shipment leaves the seller (Shipping Point) or when it arrives at the buyer (Destination)- Don’t forget to write the date with every journal entry you write- Only count the credit discount if the merchandise was paid within the specified time frame- Cash is recorded at the end of the journal entriesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.II. How to Calculate Beginning Inventory1. Inventory T-accountInventoryBeginning Inventory, Purchases, Shipping | Returns, Discounts, Cost of Goods Sold= Ending Inventory |2. Solve for BEi. Example from Collection 1:Beginning Inv. + Purchases + Shipping – Returns – Discounts – COGS = Ending Inv.BE + 186,000 + 0 – 16,740 – 3,385.20 – 1165874.80 = 1,500,000BE = 2,500,000III. How to Calculate Ending Inventory1. Solve for EIi. Example from Collection 1:Reference the T account above2,500,000 + 186,000 + 0 – 16,740 – 3,385.20 – 1,165,874.80 = EIEI = 1,500,000IV. How to Calculate Cost of Goods Sold1. Solve for COGSi. Example from Collection 1:Also known as Cost of Merchandise Sold (COMS)2,500,000 + 186,000 + 0 – 16,740 – 3,385.20 – COGS = 1,500,000COGS =