Roley Corporation uses a periodic inventory system and the gross method of accounting for...
Question:
Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $82,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of $1,510. On July 3, Roley returned damaged goods and received a credit of $8,200. On July 10, Roley paid for the goods.
Prepare all necessary journal entries for Roley.
Periodic Inventory:
The companies that follow the periodic inventory valuation method will update the inventory at the end of the financial year to determine the cost of goods sold as well as the value of the ending inventory.
Answer and Explanation: 1
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View this answer| Date | Particulars | Debit | Credit |
|---|---|---|---|
| Jul. 1 | Purchases | 82,000 | |
| Accounts payable | 82,000 | ||
| Freight | 1,510 | ||
| Cash | 1,510 | ||
| Jul. 3 | Accounts payable | 8,200 | |
| Purchase returns | ... |
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Periodic Inventory System: Definition, Advantages & Examples
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