Crest view Computer security uses the perpectualinventory system and makes all c

Question

Crest view Computer security uses the perpectualinventory system and makes all credit sales on terms of 2/10 n/30.crest view completed the following transactions

May 2nd. issued invoice # 913 for sale on account toforbes, $ 2000. Crestview cost of inv. was $900

         3rd Purchased inventory on credit terms of 3/10 n/60 fromCricosky

         5th  Sold inventory for cash $1077 ( cost $480)

        8th    Collected interest revenue of $1755

         9th    Issued invoice # 914. for sale on account to bell Co. $5550 ( cost2310)

       10       Puchased inventory forcash $ 1143 issing check # 553

       12th    Recieved cash from Forbes in full settlementof her A/R from teh sale on May 2nd

        13th  Issued check # 534 to pay croisky the net amt owed from May 3rd

         13th Purchased supplies on account from Manley Inc. $441 Terms were netend of month

         15th  Soldinv. on account to Brown for $665 ( cost 240)

        17th  issued credit memo to Brown for $665 for mechandise return by Brown. also accounted for

                 receipt of the inventory cost

         18th Issued invoice # 916 for credit sale to Forbes $357 ( cost $127)

         19th recieved $5439 from Bell in full settlement of its A/R from may 9th. Bell earned a discount

                   frompaying early

        20th   Purchased inventory on credit terms of

Explanation / Answer

In Perpetual inventory system, cost of goods sold is debited foreach sales made. In periodic system, you calculate the costof goods sold by the end of the period. May 2   Accounts receivable      2,000       Sales                             2,000 Cost of goods sold       900        Inventory                900 ( For this sale, your sales price is 2,000 to the customer and yourcost of goods (that is inventory ) is 900. Perpetual keeps track ofcost of goods sold for each sale. May 3 Inventory             2,467    Accountspayable        2,467 May 5 Cash         1,077    Sales         1,077 Cost of goods sold       480    Inventory                   480 5. Furniture         2,185      Cash              2,185 8. Cash        1,775 Interest revenue 1,775 9. Accounts receivable      5,550        Sales                            5,550      Cost of goods sold    2,310           Inventory                 2,310 10. Inventory        1,143      Cash                 1,143 12.     Cash              1,960      Sales discounts    40              Accounts receivable    2,000 ( Forbes paid the invoice before 10 days, so 2% discount wasprovided 2,000 * 2 % = $ 40) 13.   Supplies          441        Accounts payable 441 15. Accounts receivable      665        Sales                          665 Cost of goodssold         240       Inventory                    240 17.     Sales returns andallowances       665            Accountsreceivable                  665    Inventory         240        Cost of goods sold  240 18. Accounts receivable   357       Sales                        357 Cost of goods sold      127    Inventory    127 19.    Cash           5,439    Sales discounts 111       Accounts receivable 5,550 ( 2% of 5,550 is 111) 20.    Inventory 2,047 Accounts payable 2,047 22. Furniture    645    Accounts payable 645 22. Prepaid insurance 1,000 Cash       1,000 24. Cash 54    Supplies 54 25. Utilities expense 453 Cash       453 28. Inventory    675 Accounts payable 675 29. Accounts payable 675 Purchase returns 675 29. Accounts receivable    2,900 Sales          2,900    Cost of goods sold     800 Inventory      800 30. Accounts payable    441    Cash    441 ( End of month term does n't have any discount terms - so , nodiscounts received when paid) 31. Cash    357 Accounts receivable 357 31. Salaries expense     1,950     Cash                      1,950

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