Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 8.2BE
To determine
Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.
To Record: The journal entries for given transactions.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
QUESTION 1
Sony Company had the following transactions in December:
Dec. 2
Sony purchased $150,000 merchandise inventory on account terms, 3/10, n/30, FOB shipping point.
Dec. 4
Sony returned $10,000 of the merchandise purchased on Dec. 2 because it was defective.
Dec. 10
Sony paid the invoice dated Dec 2 less returns and discount.
Required: Prepare journal entries for these 3 transactions assuming Sony uses a perpetual inventory system.
Chapter 5 Problems
Sales-related transactions using perpetual inventory system.
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers:
Mar. 2. Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,300.
Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,000.
Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of merchandise sold was $33,200.
Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $19,400.
Received check for amount due from Equinox Co. for sale on March 2.
Sold merchandise to customers who used American Express cards, $13,700. The cost of merchandise sold was $8,350.
Sold merchandise on account to Targhee Co., $27,500, terms…
Exercise 8-1 (Algo) Perpetual inventory system; journal entries (LO8-1]
John's Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May:
1. John's purchased merchandise on account for $5,500. Freight charges of $550 were paid in cash.
2. John's returned some of the merchandise purchased in (1). The cost of the merchandise was $850 and John's account was credited
by the supplier.
3. Merchandise costing $3,050 was sold for $5,700 in cash.
Required:
Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field.)
X Answer is not complete.
No
Transaction
General Journal
Debit
Credit
1a
Inventory
500 X
Accounts payable
500
1b
Inventory
Cash
02
Accounts payable
Inventory
4
За
Cash
Sales revenue
Chapter 8 Solutions
Intermediate Accounting, 10 Ed
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.5ECh. 8 - Physical quantities and costs included in...Ch. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - Prob. 8.19ECh. 8 - Prob. 8.20ECh. 8 - Prob. 8.21ECh. 8 - Prob. 8.23ECh. 8 - Prob. 8.25ECh. 8 - Prob. 8.30ECh. 8 - Prob. 8.31ECh. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Prob. 8.6PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.1DMPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Prob. 8.4DMPCh. 8 - Prob. 8.5DMPCh. 8 - Prob. 8.8DMPCh. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 1CCTCCh. 8 - Prob. 2CCTC
Knowledge Booster
Similar questions
- Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: May 1. Paid rent for May, 5,000. 3. Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, 36,000. 4. Paid freight on purchase of May 3, 600. 6. Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, 68,500. The cost of the merchandise sold was 41,000. 7. Received 22,300 cash from Halstad Co. on account. 10. Sold merchandise for cash, 54,000. The cost of the merchandise sold was 32,000. 13. Paid for merchandise purchased on May 3. 15. Paid advertising expense for last half of May, 11,000. 16. Received cash from sale of May 6. 19. Purchased merchandise for cash, 18,700. 19. Paid 33,450 to Buttons Co. on account. 20. Paid Korman Co. a cash refund of 13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was 13,500 and the cost of the returned merchandise was 8,000. Record the following transactions on Page 21 of the journal: 20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, 110,000. The cost of the merchandise sold was 70,000. 21. For the convenience of Crescent Co., paid freight on sale of May 20, 2,300. 21. Received 42,900 cash from Gee Co. on account. May 21. Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, 88,000. 24. Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for 5,000. 26. Refunded cash on sales made for cash, 7,500. The cost of the merchandise returned was 4,800. 28. Paid sales salaries of 56,000 and office salaries of 29, 000. 29. Purchased store supplies for cash, 2,400. 30. Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, 78,750. The cost of the merchandise sold was 47,000. 30. Received cash from sale of May 20 plus freight paid on May 21. 31. Paid for purchase of May 21, less return of May 24. Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the Posting Reference column. Journalize the transactions for July, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). f. The adjustment for customer returns and allowances is 60,000 for sales and 35,000 for cost of merchandise sold. 5. (Optional) Enter the unadjusted trial balance on a IO-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owners capital account. 10. Prepare a post-closing trial balance.arrow_forward! Required information Problem 6-9B Record transactions and prepare a partial income statement using a periodic inventory system (LO6-8) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,550. The following transactions occur during the month of June. 2 Purchase radios on account from Radio World for $2,250, terms 2/15, n/45. 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $310. 8 Return defective radios to Radio World and receive credit, $400. June June June June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,100, that had a cost of $2,750. June 18 Receive payment on account from customers, $3,100. June 20 Purchase radios on account from Sound Unlimited for $3,350, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,850, that had a cost of $3,150. June 26 Return damaged radios to Sound Unlimited and receive credit of…arrow_forward! Required information Problem 6-9B Record transactions and prepare a partial income statement using a periodic inventory system (LO6-8) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,550. The following transactions occur during the month of June. 2 Purchase radios on account from Radio World for $2,250, terms 2/15, n/45. 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $310. 8 Return defective radios to Radio World and receive credit, $400. June June June June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,100, that had a cost of $2,750. June 18 Receive payment on account from customers, $3,100. June 20 Purchase radios on account from Sound Unlimited for $3,350, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,850, that had a cost of $3,150. June 26 Return damaged radios to Sound Unlimited and receive credit of…arrow_forward
- ! Required information Problem 6-9B Record transactions and prepare a partial income statement using a periodic inventory system (LO6-8) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,550. The following transactions occur during the month of June. 2 Purchase radios on account from Radio World for $2,250, terms 2/15, n/45. 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $310. 8 Return defective radios to Radio World and receive credit, $400. June June June June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,100, that had a cost of $2,750. June 18 Receive payment on account from customers, $3,100. June 20 Purchase radios on account from Sound Unlimited for $3,350, terms 2/10, n/30. June 23 Selll radios to customers for cash, $4,850, that had a cost of $3,150. June 26 Return damaged radios to Sound Unlimited and receive credit of…arrow_forwardView Policies Current Attempt in Progress Sheffield Limited uses the average cost formula in a perpetual inventory system. Fill in the missing amounts for items [1] to [13]in the following perpetual inventory schedule. (Round per unit cost and total cost to 2 decimal places, e.g. 15.23.) Purchases Date Units Cost Total Units Cost April 1 6 29 [1] $ $5,742 26 [5] $ 14 [10] $201 $2,211 eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answerarrow_forwardProblem 6-3B (Algo) Record transactions and prepare a partial income statement using a perpetual inventory system (LO6-2, 6-5) At the beginning of June, Circuit Country has a balance in inventory of $2,100. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $1,800, terms 1/15, n/45. June 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $220. June 8 Return defective radios to Radio World and receive credit, $200. June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $3,200, that had a cost of $2,300. June 18 Receive payment on account from customers, $2,200. June 28 Purchase radios on account from Sound Unlimited for $2,900, terms 3/10, n/30. June 23 Sell radios to customers for cash, $4,400, that had a cost of $2,700. June 26 Return damaged radios to Sound Unlimited and receive credit of $400. June 28 Pay Sound Unlimited in full. Required: 1. Assuming that Circuit…arrow_forward
- Required information Problem 6-9B Record transactions and prepare a partial income statement using a periodic inventory system (LO6-8) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,550. The following transactions occur during the month of June. 2 Purchase radios on account from Radio World for $2,250, terms 2/15, n/45. 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $310. 8 Return defective radios to Radio World and receive credit, $400. June June June June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,100, that had a cost of $2,750. June 18 Receive payment on account from customers, $3,100. June 20 Purchase radios on account from Sound Unlimited for $3,350, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,850, that had a cost of $3,150. June 26 Return damaged radios to Sound Unlimited and receive credit of $500.…arrow_forward! Required information Problem 6-3B Record transactions and prepare a partial income statement using a perpetual inventory system (LO6-2, 6-5) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,450. The following transactions occur during the month of June. 2 Purchase radios on account from Radio World for $2,150, terms 2/15, n/45. 4 Pay cash for freight charges related to the June 2 purchase from Radio World, $290. 8 Return defective radios to Radio World and receive credit, $300. June June June June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $3,900, that had a cost of $2,650. June 18 Receive payment on account from customers, $2,900. June 20 Purchase radios on account from Sound Unlimited for $3,250, terms 2/10, n/30. June 23 Sell radios to customers for cash, $4,750, that had a cost of $3,050. June 26 Return damaged radios to Sound Unlimited and receive credit…arrow_forward8:36 1 2. The estimated cost of the inventory sold this year and expected to be returned by customers next year is $5,900. Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts. Answer | E 14-11A Journalize Adjusting Entry for Inventory Shrinkage: Perpetual Inventory System (LO5) On December 31, Anup Enterprises completed a physical count of its inventory. Although the merchandise inventory account shows a balance of $350,000, the physical count comes to $325,000. Prepare the appropriate adjusting entry under the perpetual inventory system. Series A Problems P 14-12A Preparation of Adjustments on a Spreadsheet for a Merchandising Business: Periodic Method (LO1/2/3/4) The trial balance for the Venice Beach Kite Shop, a business owned by Molly Young is shown belowon page 552. Year-end adjustment information is as follows: (a, A physical count shows that merchandise b) inventory costing $85,000 is on hand as of December 31, 20--. (c,…arrow_forward
- Required information Problem 6-9B Record transactions and prepare a partial income statement using a periodic inventory system (LO6-8) [The following information applies to the questions displayed below.] At the beginning of June, Circuit Country has a balance in inventory of $2,600. The following transactions occur during the month of June. June 2 Purchase radios on account from Radio World for $2, 300, terms 1/15, n/45. June 4 Pay cash for freight charges related to the June 2 purchase from Radio world, $320. June 8 Return defective radios to Radio World and receive credit, $200. June 10 Pay Radio World in full. June 11 Sell radios to customers on account, $4,200, that had a cost of $2,800. June 18 Receive payment on account from customers, $3,200. June 20 Purchase radios on account from Sound Unlimited for $3,400, terms 3/10, n/30. June 23 Sell radios to customers for cash, $4,900, that had a cost of $3,200. June 26 Return damaged radios to Sound Unlimited and receive credit of…arrow_forwardJournalize Acct 201 Co's November transactions below. Acct 201 uses a perpetual inventory system and the "net" method for recording sales and purchases. Nov. 3 Purchased merchandise on account from ML Co., list price $100,000, trade discount 25%, terms FOB destination, 2/10, n/30. Nov. 4 Sold merchandise for cash, $37,680. The cost of the merchandise sold was $22,600. Nov. 6 Returned $15,000 ($20,000 list price less trade discount of 25%) of merchandise purchased on November 3 from ML Co. Nov. 8 Sold merchandise on account to Q Co., $15,600 with terms n/15. The cost of the merchandise sold was $9,400. Nov. 13 Paid ML Co. on account for purchase of November 3, less return of November6. Nov. 14 Sold merchandise on VISA, $236,000. The cost of the merchandise sold was $140,000. Nov. 23 Received cash on account from sale of November 8 to Q Co. Nov. 24 Sold merchandise on account to R Cp., $56,900, terms 1/10, n/30. The cost of the merchandise sold was $34,000. Nov. 28 Paid VISA service fee…arrow_forwardRelated and Purchase-Related Transactions Using Perpetual Inventory System llowing were selected from among the transactions completed by Harrison Company during November of the current year: v. 3. Purchased merchandise on account from Moonlight Co., list price $92,000, trade discount 25%, terms FOB destination, 2/10, n/30. 4. Sold merchandise for cash, $37,520. The cost of the merchandise sold was $22,550. 5. Purchased merchandise on account from Papoose Creek Co., $48,550, terms FOB shipping point, 2/10, n/30, with prepaid freight of $880 6. Returned $14,250 ($19,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co. 8. Sold merchandise on account to Quinn Co., $15,700 with terms n/15. The cost of the merchandise sold was $8,640. 13. Paid Moonlight Co. on account for purchase of November 3, less return of November 6. 14. Sold merchandise on VISA, $238,030. The cost of the merchandise sold was $150,770. 15. Paid Papoose Creek Co. on…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning