On June 10, Purcey Company purchased $8,200 of merchandise from Guyer Company, terms 4/10, n/30....

Question:

On June 10, Purcey Company purchased $8,200 of merchandise from Guyer Company, terms 4/10, n/30. Purcey pays the freight cost of $420 on June 11. Goods totaling $200 are returned to Guyer for credit on June 12. On June 19, Purcey Company pays Guyer Company in full, less the purchase discount. Both companies use a perpetual inventory system.

Prepare separate entries for each transaction on the books of Purcey Company.

Perpetual Inventory System:

Perpetual inventory system is one of the methods used in accounting for inventories. This system uses the account merchandise inventory in almost all of its transactions.

Answer and Explanation: 1

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DateAccount Title Debit Credit
6/10Merchandise Inventory 8,200
Accounts Payable 8,200
6/11Merchandise Inventory 420
Cash 420
6/12 Accoun...

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Perpetual Inventory System: Definition, Advantages & Examples

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Chapter 1 / Lesson 15
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Learn about the perpetual inventory system and how it is used. Explore the advantages of perpetual inventory systems and compare perpetual vs. periodic inventory.


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