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Inventory Systems

SE 5 Record in journal form each of the following transactions, assuming the perpetual inventory system is used:

August 2 - Purchased merchandise on credit from Bean Company, invoice dated August 1, terms n/10, FOB shipping point $2,300.
3 - Received bill from Ace Shipping Company for transportation costs on August 2 shipment, invoice dated August 1, terms n/30, $210.
7 - Returned damaged merchandise received from Bean Company on August 2 for credit, $360.
10 - Paid in full amount due to Bean Company for the purchase of August 2, part of which was returned on August 7.

SE6 Record in journal form the following transactions, assuming the perpetual inventory system is used:

August 4 - Sold merchandise on credit to Konner Company, terms, n/30, FOB destination, $1,200. (Cost = $720)
5 - Paid transportation costs for sale of August 4, $110.
9 - Part of the merchandise sold August 4 was accepted back from Konner Company for full credit and returned to the merchandise inventory, $350. (Cost = $ 210)
September 3 - Received payment in full from Konner Company for merchandise sold on August 4, less the return on August 9.

SE 7 Record in journal form the transactions in SE 5, assuming the periodic inventory system is used:

SE 8 Using the following data and assuming cost of goods sold is $230,000, prepare the cost of goods sold section of a merchandising income statement (periodic inventory system), including computation of the amount of purchases for the month of October:

Freight in $ 12,000
Merchandise inventory, Sept. 30, 20xx 33,000
Merchandise inventory, Oct. 30, 20xx 44,000
Purchases ?
Purchases returns and allowances 9,000

SE 9 Record in journal form the transactions in SE 6, assuming the periodic inventory system.

SE 10 Forrester Company had beginning merchandise inventory of $ 14,800 and ending merchandise inventory of $ 19,200. Where would these numbers appear on the worksheet and in the closing entries under (1) the perpetual inventory system and (2) the periodic inventory system?

SE 11 On April 15, Farid Company sold merchandise to Smarte Company for $1,500 on terms of 2/10, n/30. Record the entries in both Farids and Smarte's records for (1) the sale, (2) a return of merchandise on April 20, of $300, and (3) payment in full on April 25. Assume both companies use the periodic inventory system.

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Solution Summary

SE 5 Record in journal form each of the following transactions, assuming the perpetual inventory system is used:

August 2 - Purchased merchandise on credit from Bean Company, invoice dated August 1, terms n/10, FOB shipping point $2,300.
3 - Received bill from Ace Shipping Company for transportation costs on August 2 shipment, invoice dated August 1, terms n/30, $210.
7 - Returned damaged merchandise received from Bean Company on August 2 for credit, $360.
10 - Paid in full amount due to Bean Company for the purchase of August 2, part of which was returned on August 7.

SE6 Record in journal form the following transactions, assuming the perpetual inventory system is used:

August 4 - Sold merchandise on credit to Konner Company, terms, n/30, FOB destination, $1,200. (Cost = $720)
5 - Paid transportation costs for sale of August 4, $110.
9 - Part of the merchandise sold August 4 was accepted back from Konner Company for full credit and returned to the merchandise inventory, $350. (Cost = $ 210)
September 3 - Received payment in full from Konner Company for merchandise sold on August 4, less the return on August 9.

SE 7 Record in journal form the transactions in SE 5, assuming the periodic inventory system is used:

SE 8 Using the following data and assuming cost of goods sold is $230,000, prepare the cost of goods sold section of a merchandising income statement (periodic inventory system), including computation of the amount of purchases for the month of October:

Freight in $ 12,000
Merchandise inventory, Sept. 30, 20xx 33,000
Merchandise inventory, Oct. 30, 20xx 44,000
Purchases ?
Purchases returns and allowances 9,000

SE 9 Record in journal form the transactions in SE 6, assuming the periodic inventory system.

SE 10 Forrester Company had beginning merchandise inventory of $ 14,800 and ending merchandise inventory of $ 19,200. Where would these numbers appear on the worksheet and in the closing entries under (1) the perpetual inventory system and (2) the periodic inventory system?

SE 11 On April 15, Farid Company sold merchandise to Smarte Company for $1,500 on terms of 2/10, n/30. Record the entries in both Farids and Smarte's records for (1) the sale, (2) a return of merchandise on April 20, of $300, and (3) payment in full on April 25. Assume both companies use the periodic inventory system.

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