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Axe Corporation

Recording Journal Entries for Purchases and Purchase Discounts Using a
Perpetual Inventory System
Using the information in E6-8, prepare journal entries to record the transactions, assuming Axe
uses a perpetual inventory system.

E6-8

During the months of January and February, Axe Corporation purchased goods from three
suppliers. The sequence of events was as follows:
Jan. 6 Purchased goods for $1,000 from Green with terms 2/10, n/30.
6 Purchased goods from Munoz for $800 with terms 2/10, n/30.
14 Paid Green in full.
Feb. 2 Paid Munoz in full.
28 Purchased goods for $500 from Reynolds with terms 2/10, n/45.

Assume that Axe uses a perpetual inventory system, the company had no inventory on hand at
the beginning of January, and no sales were made during January and February. Calculate the cost
of inventory as of February 28

Solution Preview

Recording Journal Entries for Purchases and Purchase Discounts Using a
Perpetual Inventory System
Using the information in E6-8, prepare journal entries to record the transactions, assuming Axe uses a perpetual inventory system.

E6-8

During the months of January and February, Axe Corporation purchased ...

Solution Summary

This solution is comprised of a detailed explanation to prepare journal entries to record the transactions, assuming Axe
uses a perpetual inventory system.

$2.19