The following transactions were selected from the records of Evergreen Company: July 12 Sold...
Question:
The following transactions were selected from the records of Evergreen Company:
| July 12 | Sold merchandise to Wally Butler, who paid the $1,300 purchase with cash. The goods cost Evergreen Company $750. |
| July 15 | Sold merchandise to Claudio's Chair Company at a selling price of $5,600 on terms 5/10, n/30. The goods cost Evergreen Company $3,800. |
| July 20 | Sold merchandise to Oto's Ottomans at a selling price of $3,300 on terms 5/10, n/30. The goods cost Evergreen Company $2,200. |
| July 23 | Collected payments from Claudio's Chair Company from the July 15 sale. |
| Aug. 25 | Collected payment from Otto's Ottomans from the July 20 sale. |
Required:
Prepare journal entries to record the transactions, assuming Evergreen Company uses a perpetual inventory system.
Perpetual Invenory:
In the perpetual inventory valuation method, the financial transactions are recorded every time a sale and purchase transaction is made. So real-time data is available at all times about inventory.
Answer and Explanation: 1
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View this answerEvergreen Company
Journal Entries
| Date | Particulars | Debit ($) | Credit ($) | Calculation |
|---|---|---|---|---|
| Jul. 12 | Cash | 1,300 | ||
| Sales revenue | 1,300 | |||
| Cost of goods sold | 750 |
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Perpetual Inventory System: Definition, Advantages & Examples
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Chapter 1 / Lesson 15
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Perpetual inventory systems are used by businesses to monitor their inventories in real-time with the use of radio frequency identification, barcodes, point of sales, and other technological systems. Learn about the definition of a perpetual inventory system, the advantages of using this system, and some examples of perpetual inventory systems.
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