PB6-5 (Supplement A) Recording Inventory Transactions Using Periodic and Perpetu
ID: 2553844 • Letter: P
Question
PB6-5 (Supplement A) Recording Inventory Transactions Using Periodic and Perpetual Inventory Systems [LO 6-S1] [The following information applies to the questions displayed below.] Sigfusson Supplies reported beginning inventory of 80 units, for a total cost of $2,000. The company had the following transactions during the month: Jan. 6 Sold 20 shovels on account at a selling price of $35 per unit. 9 Bought 10 shovels on account at a selling price of $25 per unit. 11 Sold 10 shovels on account at a cost of $40 per unit. 19 Sold 20 shovels on account at a selling price of $45 per unit. 27 Bought 10 shovels on account at a cost of $25 per unit. 31 Counted inventory and determined that 30 units were on hand. 1. Prepare the journal entries that would be recorded using periodic inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 2. Prepare the journal entries that would be recorded using a perpetual inventory system, including any “book-to-physical” adjustment that might be needed. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Explanation / Answer
1)Periodic Inventory method :
**Units available for sale 80 beginning +10+ 10 = 100
units sold : 100-30 = 70
cost of inventory sold : $ 25
2)Perpetual method :
Date Account Debit credit jan 6 Accounts receivable 700 sales revenue [20*35] 700 jan 9 Purchase 250 Accounts payable [10*25] 250 Jan 11 Accounts receivable 400 sales revenue [10*40] 400 jan 19 Accounts receivable 900 sales revenue [20*45] 900 jan 27 purchase 250 aaccounts payable [10*25] 250 jan 31 cost of goods sold 1750 merchandise inventory [70*25] 1750Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.