Perpetual Inventory Questions and Answers

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Perpetual Inventory Questions and Answers

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On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with terms 2/10, n/30. On May 8, Ace pays for this inventory and records which of the following using a perpetual invento...
Determine the accounting term being defined or described by the following statement: A detailed inventory record is maintained, recording each purchase and sale during the accounting period. Cho...
Determine the accounting term being defined or described by the following statement: An unrecorded decrease in inventory resulting from the discrepancy between the quantities of goods shown on reco...
The following selected transactions were completed during August between Summit Co. and Beartooth Co.: Aug. 1 Summit Co. sold merchandise on account to Beartooth Co., $47,600, terms FOB destination...
Prepare the journal entries to record the following purchase transactions in Sheridan Company's books. Sheridan uses a perpetual inventory system.
Below are four transactions for Carlson Company relating to its inventory during July. Prepare the journal entry to record the July 25th transaction below for Carlson Company using the perpetual in...
Bonita Industries took a physical inventory on December 31 and determined that foods costing $210,000 were on hand. Not included in the physical count were $24,000 of goods purchased from Metlock,...
Which of the following does not correctly describe the effect of recording a credit sale of inventory for a profit? a. Sales are recorded when the title and risks of ownership are transferred to t...
Using a perpetual inventory system, the journal entry on the purchaser's books (not the seller), to record the receipt of a discount from the prompt payment for merchandise paid within the discount...
When merchandise that was sold on the account is subsequently returned using the perpetual inventory system which accounts are affected in the books of the seller? a. Sales returns, accounts receiv...
Merchandise Inventory would be debited when goods are purchased by a company that uses a perpetual inventory system. True or False?
During January, a company that uses a perpetual inventory system had beginning inventory, purchases, and sales as follows: Units Cost per unit Beginning Inventory 100 $15 Jan. 5, Sales 50 Jan. 10,...
Both a perpetual and periodic inventory system requires a year-end count of inventory. True or False?
In a perpetual inventory system, the recording of a sale requires two entries, one to record the revenue and the other to the cost of goods sold. True or False?
How to calculate closing stock in the trading a/c? Explain.
Readers.com uses a perpetual inventory system and has the following data for the month of February: Feb. 1 On hand, 30 units @ $5.00 each $150 8 Purchased 40 units @ $5.35 each 214 15 Sold 50 units...
The Following Data: July 1 Purchased merchandise from Boden Company for $6,700 under credit terms of 2/15, n/30], FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Creek Co. for...
Miller Inc. is a wholesaler of office supplies. The activity for Model III calculators during August is shown below. Date Transaction Units Cost August 1 Inventory 2,000 36 7 Purchase 3,000 37.20 1...
Mary Company uses the perpetual inventory system. The following May data are for an item in Merritt's inventory: May 1 Beginning inventory 150 units @ $30 per unit May 12 Purchased 100 units @ $35...
Juniper Company, Inc. uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On Aug...
Calculate the missing information for each of the following independent cases: Cases Beginning Inventory Purchases Cost of Goods Sold Ending Inventory (perpetual system) Ending Inventory (as counte...
Sunland Company uses a perpetual inventory system. Its beginning inventory consists of 83 units that cost $56 each. During June (1) the company purchased 248 units at $56 each on account, (2) retur...
For Rigoletto Corp. and Villanuevo, Inc., the following transactions occurred during the month of April: a. On April 1, Rigoletto Corp. purchased merchandise on account from Villanuevo, Inc. with c...
At the beginning of the current season on April 1, the ledger of Sandhill Pro Shop showed Cash of $3,100; Inventory at $4,100; and Common Stock at $7,200. The following transactions occurred during...
Tracy Company, a manufacturer of air conditioners, sold 140 units to Thomas Company on November 17, 2021. The units have a list price of $450 each, but Thomas was given a 20% trade discount. The te...
Warwick's Co., a women's clothing store, purchased $19,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Warwick's returned $3,000 of the merchandise, receiving a cr...
Concord Company uses a perpetual inventory system. Its beginning inventory consists of 63 units that cost $43 each. During June, (1) the company purchased 188 units at $43 each on account, (2) retu...
Companies using a perpetual inventory system: a. always know the actual amount in inventory from their accounting records. b. still need to count the physical inventory occasionally. c. must physic...
The following events took place for Chi-Lite Inc. during June 2016, the first month of operations as a producer of road bikes: -Purchased $396,730 of materials. -Used $343,310 of direct materia...
Wildhorse Co. has the following information available for accruals for the year ending December 31, 2017. The company adjusts its accounts annually. 1. The December utility bill for $460 was unreco...
Most merchandise companies use computerized (blank). a. google spreadsheets b. machinery software sales c. perpetual inventory systems d. net income
Which of the following is a true statement for a company using a perpetual inventory system? A) Purchase returns and allowances are a contra account to accounts receivable. B) Sales returns and all...
There are two different types of inventory systems-perpetual and periodic. What is the difference between the two in terms of how inventory is tracked and how it is recorded on the books?
A company that uses the perpetual inventory system purchases inventory for $62,000 on account, with terms of 2/10, n/30. Which of the following is the journal entry to record the payment made withi...
Crane Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, and n/30 to all of its customers. During the month of June, the following merchandising transactions oc...
On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $3,570 on Invoice 1001, terms 1/10, n/30. The cost of merchandise sold was $2,140. The payment was received...
A company sold merchandise with a cost of $213 for $440 on the account. The seller uses the perpetual inventory system. The entry to record the cost of merchandise sold would include: A. a debit to...
Which of the following is NOT recorded in a modern perpetual inventory system? A) Units purchased and cost amounts. B) Units sold and sales and cost amounts. C) The quantity of merchandise inven...
At the beginning of the current season on April 1, the ledger of Blossom Pro Shop showed Cash of $2,600; Inventory at $3,500; and Common Stock at $6,100. The following transactions were completed i...
Hahn Flooring Company's perpetual inventory records indicate that $1,333,150 of merchandise should be on hand on December 31, 2019. The physical inventory indicates that $1,309,900 of merchandise i...
The Wheatland Company purchased merchandise on account from a supplier for $30,000, terms 1/10, n/30. The Wheatland Company returned $8,000 of the merchandise and received full credit. a. What is...
The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019: Increase in estimated returns inventory $11,600 Merchandise inventory, May 1, 201...
Beginning inventory, purchases, and sales for Meta-B1 are as follows: July 1 Inventory 100 units at $400 12 Sale 70 units 23 Purchase 120 units at $450 26 Sale 110 units Assuming a perpetual invent...
Addison, Inc. uses a perpetual inventory system. The following is information about inventory for the month of September: Sep. 1 Inventory 30 units at $10 5 Sold 20 units 12 Purchased 20 units at $...
Which of the following statements is correct? a. The purchases account is used under both the periodic and perpetual inventory systems. b. The perpetual inventory system continually updates the i...
If a company uses a perpetual inventory system, it will maintain all the following accounts except: a. purchases. b. inventory. c. sales. d. cost of goods sold. e. All of the above accounts ar...
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 B...
LoCo, which uses the periodic method, purchases merchandise on account for $56,000, F.O.B. shipping point. Freight charges are $900 C.O.D. LoCo should record these purchases as: a. Dr. Purchases, $...
Accounting records for High Life Corporation yield the following data for the year ended June 30, 2018 (assuming sales returns are non-existent): Inventory, June 30, 2017 $9,000 Purchases of invent...
Under a perpetual inventory system, the account to which transportation charges on incoming merchandise is generally entered is: A. inventory. B. FOB shipping. C. delivery expense. D. FOB desti...
Journalize the following transactions for Nasheville Art Gift Shop. Assume Nasheville uses the gross method to record sales revenue. Assume the company uses a perpetual inventory system. Feb. 3 Pur...
In its first year, FiCo, which uses the perpetual method and records purchases at net, buys two lots of sweaters, 1/10, n/30: one lot on March 10 for $4,000, paying the invoice on March 16: a secon...
NiCo begins operations in 20X4, makes all sales on account, uses the perpetual method and FIFO costing and shows the following data: Purchases Sales February 4 700 @ $7 May 11 400 @ $15 July 14 1,1...
Longmire & Sons made sales on credit to Alderman Sport totaling $600,000 on April 18. The cost of the goods sold is $500,000. Longmire estimates that 2% of its sales to Alderman may be returned. On...
What are the results of the physical count are compared to? a. last year's count. b. the computer (or book) count. c. balance sheet value. d. last quarter's count.
On September 1, Snow Supply had an inventory of 15 backpacks at a cost of $25 each. The company uses a perpetual inventory system. During September, the following transactions and events occurred....
Hegge Company uses the periodic inventory system. The following entries are for April, assuming Hegge Company uses the gross price method of recording direct material purchases. Apr. 6 Purchased $1...
Floopy uses the periodic inventory method for inventories. 1. On January 5, 2015, purchased $17,000 of garden tillers on account from Flip, terms 2/10, n/30, FOB destination. Freight charges were $...
Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018: Aug. 1 Inventory on hand-3,000 units; cost $7.10...
This information relates to Metlock Co. 1. On April 5, purchased merchandise from Ivanhoe Company for $26,200, terms 3/10, n/30. 2. On April 6, paid freight costs of $540 on merchandise purchased f...
Using a perpetual inventory system, the purchase of inventory is recorded with a: a) Debit to Inventory. b) Debit to Cost of Goods Sold. c) Credit to Sales Revenue.
Using a perpetual inventory system, the sale of inventory on the account is recorded with a: a) Debit to Cost of Goods Sold. b) Credit to Inventory. c) Credit to Sales Revenue. d) All of the ot...
Patricia's Fabrics sells sewing machines and fabrics. On December 31, 2016, Patricia's inventory amounted to $690,000. During the first week of January 2017, the company made only one purchase and...
Record the following transactions that occurred during March 2019 for Harris Manufacturing Company, which uses the perpetual inventory system: Mar. 12 Transferred $35,000 of completed goods from th...
Paulson Manufacturing Company uses the perpetual inventory system to account for its manufacturing inventories. The following are Paulson's transactions during July 2019: July 5 Received material c...
Under a perpetual inventory system, acquisition of merchandise for resale is debited to the: a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold a...
Why is the perpetual inventory system superior to the periodic system for business purposes?
Paul Corporation reports the following inventory information: Cost Market December 31, Year 1 312,000 292,000 December 31, Year 2 303,000 284,000 Assuming Paul Corporation uses the perpetual invent...
In a perpetual inventory system, beginning inventory, purchases, and sales for an item are as follows: April 1Inventory62 units at $ 20 April 10Sale52 units April 17Purchase40 units at $ 19 April 2...
Prepare journal entries to record the transactions for a retail store. Assume a perpetual inventory system *April 2: Purchased merchandise from Lyon Company under the following terms: $5,300 price...
Use this inventory information for the month of March to answer the following questions. March 1 Beginning inventory 20 units @ $76 7 Purchase 70 units @ $80 18 Sale 25 units 22 Purchase 10 units @...
Identify whether the following description best applies to a period or to a perpetual inventory system: Records cost of goods sold each time a sale transaction occurs.
Identify whether the following description best applies to a period or to a perpetual inventory system: Markedly increase in frequency and popularity in business within the past decade.
A major difference between the Periodic and Perpetual Inventory methods is: a. We have to use two journal entries when we record sales, sales returned, and customer collections under the Periodic m...
We note the following adjusted trial balance totals: Cash $21,000 Accounts Receivable $20,000 Allowance for Doubtful Accounts $2,000 Merchandise Inventory $20,000 Accounts Payable $16,000 Capital $...
When merchandise purchases are made for cash, under the perpetual inventory system, on the purchaser's books, the transaction: a. increases Merchandise Inventory; decreases cash. b. increases Mer...
A perpetual inventory system updates the Merchandise Inventory account for all purchases of inventory, as well as returns of inventory to suppliers. a. True b. False
Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a: a. debit to merchandise inventory. b. debit to sales. c. credit to accounts receivable. d. cr...
Pirates Corporation uses the periodic inventory system for their laptop inventory. During the year, they had the following transactions and sold 750 laptops. What is ending inventory using the LIFO...
Using the perpetual inventory system, journalize the entries for the following selected transactions: a. Sold merchandise on account, for $12,000. The cost of the merchandise sold was $6,500. (3/1...
Under a perpetual inventory system a. accounting records continuously disclose the amount of inventory b. increases in inventory resulting from purchases are debited to Purchases c. there is no...
Valley Company's adjusted trial balance on August 31, 2013, its fiscal year-end, follows. Debit ($) Credit ($) Merchandise inventory 41,000 Other (noninventory) assets 138,930 Total liabilities 24,...
West Co. recorded the following inventory information during the month of February: Units Unit cost Total cost Units on Hand Balance on 2/1 800 $2 $1,600 800 Purchased on 2/8 1,000 $3 $3,000 1,800...
Journalize the following transactions assuming a perpetual inventory system: May 5 Purchased merchandise from Archie Co., $6, 000, terms FOB shipping point 2/10, n/30. Prepaid freight costs of $10...
On July 10, 2016, Johnson Corporation signed a purchase commitment to purchase inventory for $224,000 on or before February 15, 2017. The company's fiscal year-end is December 31. The contract was...
On July 15, 2015, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, and n/30. Nixon uses a periodic inventory system and the gross...
Marquis Company uses a weighted-average perpetual inventory system. August 2 17 units were purchased at $8 per unit. August 18 22 units were purchased at $10 per unit. August 29 19 units were sold...
Littleton Books has the following transactions during May. May 2 Purchases books on account from Readers Wholesale for $2,700, terms 2/10, n/30. May 3 Pays freight costs of $140 on books purchased...
On September 1, Eden County Club had an inventory of 30 golf shirts at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sep....
On June 10, Lipizzaner Crab Shack purchased $6,000 of merchandise from Bristol Company FOB shipping point, terms 2/10, n/30. Lipizzaner pays the freight costs of $400 on June 11. Damaged goods tota...
Sundance systems has the following transactions during July. July 5- Purchases 58 LCD televisions on account from Red River Supplies for $3,400 each, terms 2/10, n/30. July 8- Returns to Red RIver...
Which of the following is not recorded in a modern perpetual inventory system? A. the quantity of merchandise inventory on hand and its cost B. units sold and sales and cost amounts C. customer acc...
Freight-in cost is a part of selling and administrative costs. (Assume perpetual inventory) a. True. b. False.
On October 1, Whaley Company sold merchandise in the amount of $2,000 to Lee Company, with credit terms of 2/10, n/30. The cost of the items sold is $1,380. Whaley uses the perpetual inventory syst...
Under the periodic inventory system, the amount of inventory on hand is determined by taking a physical count of the merchandise on hand and calculating the cost of those goods. a. True b. False
For all inventory systems, physical inventories should be taken at some point. a. True b. False
In the perpetual system, no year-end adjusting entry is necessary, as long as the physical inventory agrees with the amount reported in the merchandise inventory account. a. True b. False
The purchases account is used to record the cost of goods purchased for resale. a. True b. False
Country Cupboard purchased inventory for $5100 and also paid a 330 freight bill. Country cupboard returned 25% of the goods to the seller and later took a 1% purchase discount. Assume country cupbo...
Salah Gardening Company had the following transactions: July 1 Purchased merchandise on credit for $2,400. 7 Purchased merchandise for cash for $4,200. 9 Sold merchandise costing $4,700 for $7,500...
James Company began the month of October with an inventory of $28,000. The following inventory transactions occurred during the month: A. The company purchased merchandise on account for $41,500 o...
A merchandiser uses a perpetual inventory system. The third step in the process of closing the accounts of a merchandiser is to ________. A. make the revenue accounts equal to zero via the income s...
In a periodic inventory system, the cost of inventories sold is: A) debited to accounts receivable. B) credited to cost of goods sold. C) debited to cost of goods sold. D) not recorded at the ti...
A company sold merchandise with a cost of $215 for $390 on the account. The seller uses the perpetual inventory system. The entry to record the cost of merchandise sold would include __________.
|| ||Sales |June 5|2,200 @ $5.50 |June 10|800 @ 6.00 Assuming that perpetual inventory records are kept in dollars, the COGS on a LIFO basis is ____.
A company purchased inventory for $900 per unit. The company later sold one unit of the inventory for cash of $2,200. Under the perpetual inventory system, which accounts will be debited to record...
Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9.750 of merchandise on August 7 with terms 110 n/30. On August 11, it ret...
An advantage to using a perpetual inventory system is that the company never has to physically count the inventory. True False
On July 10, 2016, Johnson Corporation signed a purchase commitment to purchase inventory for $370,000 on or before February 15, 2017. The company's fiscal year-end is December 31. The contract was...
You have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 10%. If the bond initially costs $1,000, what is the payment every...
Following are the merchandising transactions for Chilton Systems. 1. On November 1, Chilton Systems purchased merchandise for $1,100 on credit with terms of 2/5, n/30. FOB shipping point invoice d...
Which of the following is affected as a result of an error in performing the physical count of inventory at the end of the accounting period? a. Operating expenses b. Sales revenue c. Net income...
The Tuck Shop began the current month with inventory costing $16,500, then purchased inventory at a cost of $42,500. The perpetual inventory system indicates that inventory costing $43,210 was sold...
The Acme Corporation starts the year with a beginning inventory of 300 units at $5 per unit. The company purchases 500 units at $4 each in February and 200 units at $6 each in October. Acme sells 1...
The perpetual inventory method of tracking inventory is considered superior to the periodic method because the perpetual method: A. makes calculations easier and less technology can be deployed B....
Under a periodic inventory system
Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $1,210, and the cost of the goods is $800. Both companies use perpetual inventory systems. Journal...
A record of transactions for the month of May was as follows: __Purchases__ |May 1 (balance)|400 @$5.20 |4|1,300 @$5.10 |8|800 @$5.30 |14|700 @$5.40 |22|1,200 @$5.50 |29|500 @$5.55 __Sales__ |May...
Chastain Company sold jobs with a total cost of $105,000. The selling price was $160,000. The journal entry to record this transaction is A. debit Accounts Receivable $105,000; credit sales $105,0...
The use of scanners in supermarkets has made store audit data cheaply available for all grocery products. Some people claim that this will completely replace the use of aggregate sales data for est...
Describe how the perpetual inventory system works. What are some advantages of using the perpetual inventory system? Is it necessary to take physical inventory when using the perpetual system?
'Black Tie' is a firm that sells multiple products. Below is a table showing one of the products. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 2,730 $14 2/4 Purchase 4,050 $22 2/20...
Radomir Company buys merchandise on account of Lemke Company. The selling price of the goods is $1,080, and the cost of the goods is $699. Both companies use perpetual inventory systems. Journalize...
Use the Following Data: July 1 Purchased merchandise from Boden Company for $6,500.00 under credit terms of 2/15, n 30, FOB shipping point, invoice dated July 1. July 2 Sold merchandise to Creek Co...
During January, Metro Co., which maintains a perpetual inventory system, recorded the following information pertaining to its inventory: Units Unit cost Total cost Unit on hand Balance on 1/1 1,000...
Jo-Ann Products offers the following discount schedule for its 4 ft by 8 ft sheets of plywood. Home Sweet Home orders plywood from Jo-Ann. Home Sweet Home has an ordering cost of $40. Carrying cost...
At the beginning of the current season, the ledger of Highland Tennis Shop showed Cash of $2,500; Inventory of $1,700; and Common Stock of $4,200. The following transactions were completed during A...
A company using the perpetual inventory system purchased inventory worth $25,000 on account with terms of 2/10, n/30. A defective inventory of $2,000 was returned 2 days later and the accounts were...
During January, Metro Co., which maintains a perpetual inventory system, recorded the following information pertaining to its inventory: Units Unit Cost Total Cost Balance on 1/1 1,000 $1 $1,000 Pu...
Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sep. 1 Inventory 24 units at $15 Sep. 5 Sold 17 units Sep. 17 Purc...
The sale of merchandise under the perpetual inventory procedure results in a debit to Cost of Goods Sold. a. True b. False
A company has inventory of 25 units at a cost of $6 each on June 1. On June 3, it purchased 35 units at $11 each. 27 units are sold on June 5. Using the FIFO perpetual inventory method, what is the...
On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $3,500 on Invoice 1001, terms 2/10, n/30.The cost of merchandise sold was $2,120 Payment was received in ful...
Brake Company utilizes the perpetual inventory method. Inventory information for Part # AB124 revealed the following for the month of May: May 1 Balance 250 units @ $9 May 10 Sold 200 @ $24 May 11...
If a company maintains a perpetual inventory, should its physical inventory at any date be equal to the amount indicated by the perpetual inventory records? Why?
The following information is available for the Johnson Corporation for 2016: Beginning inventory $38,000 Merchandise purchases (on account) 168,000 Freight charges on purchases (paid in cash) 23,00...
During June, the receipts and issuances of Material No. A2FO are as follows: Received June 3 Balance 1,100 units at $15 16 1,700 units at $17 29 900 units at $18 Issued June 11 700 units for Job N...
What are the three steps that must take place to obtain enough information for a periodic inventory system?
A company operates a periodic system for inventory control with a target of 200 units and a period of one week, every Monday. It is Monday, the on-hand inventory is 120, there are no units on order...
Santa Fe Company purchased merchandise for resale from Mesa Company with an invoice price of $22,600 and credit terms of 3/10, n/60. The merchandise had cost Mesa $15,413. Santa Fe paid within the...
Describe the perpetual and the periodic inventory systems. How are they different? Are there circumstances in which one system is better than the other? Include real-life examples. Your initial pos...
Show below is activity for one of the products of Denver Office Equipment: \\ 1. Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses FIFO and a perpetua...
Under the perpetual system, cash freight costs incurred by the buyer for transporting of goods is recorded in what?
Which of the following inventory accounting systems has been made much more feasible as a result of computer systems development? A) Periodic B) Physical C) Perpetual D) Just in time
A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $800 for the freight-in. The company sold the whole lot to a supermarket chain for $1...
A business using the perpetual inventory system reports $125,000 in the Inventory asset account at the end of the accounting period. A physical count of inventory shows that there is $130,000 actua...
How does a company that uses a perpetual inventory system determine the amount of inventory shrinkage?
O'Quinn Co. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, O'Quinn's inventory consisted of suitcases costing $2,082. Dur...
Inventory shipped to FOB destination and in transit on the last day of the year should be included in: a. the inventory balance of the seller. b. the inventory balance of the buyer. c. neither t...
On February 28, Yule Company sells $60,000 of goods for cash, and collects sales tax of 5%. The cost of the goods sold was $10,000, and the company uses the perpetual inventory system. What is the...
Following are the merchandise transactions for Chilton Systems. 1. On November 1, Chilton Systems purchased merchandise for $2,500 on credit with terms of 2/5, n/30, FOB shipping point, and invoice...
Zhang Company uses a perpetual inventory system to record its inventory. During May, the following transactions and events occurred. A. May 13, sold 12 motors at a cost of $40 each to LS Supply Com...
Beginning inventory, purchases, and sales for Product-Weld TM are as follows: Sep. 1 Beginning Inventory 24 units @ $10 Sep. 5 Sale 17 units Sep. 17 Purchase 10 units @ $15 Sep. 30 Sale 8 units Ass...
Prepare journal entries to record the below-merchandising transactions of Blink Company, which applies the perpetual inventory system. July 1 Purchased merchandise from Boden Company for $6,000 und...
If a purchaser using a perpetual inventory system pays the transportation costs, then a. The merchandise Inventory account is increased b. The merchandise Inventory account is not affected c. Th...
When using a perpetual inventory system, why are discounts credited to inventory? A. The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory. B....
Under the perpetual inventory system, all purchases of merchandise are debited to the account a. Merchandise Inventory b. Cost of Merchandise Sold c. Cost of Merchandise Available for Sale d. P...
Use the following Data: a. Sold merchandise on account, $13,100, with terms 2/10, net 30 on December 26. The cost of the goods sold was $8,515. b. Received payment on December 31 within the discoun...
Rita Company buys merchandise on account from Linus Company. The selling price of the goods is $1,250 and the cost of the goods sold is $720. Both companies use perpetual inventory systems. Journal...
Davis Hardware Company uses a perpetual inventory system. How should Davis record the return of inventory previously purchased on account for $280?
Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $740 for $1,050 on account?
Using a perpetual inventory system, how should a company record the sale of inventory costing $1,480 for $3,240 on account?
Using a perpetual inventory system, how should a company record the sale of inventory costing $480 for $1,120 on account?
A company purchased $2,600 of merchandise on July 5 with terms of 2/10, n/30. On July 7, it returned $325 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a...
On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventor...
Answer true or false: Under a perpetual inventory system, the acquisition of merchandise for resale is debited to purchases accounts.
Answer true or false: Job order costing system normally uses a perpetual inventory system.
A company purchased $3,600 of merchandise on July 5 with terms of 2/10, n/30. On July 7, it returned $800 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a...
On May 1, Anders Company purchased merchandise in the amount of $5,800 from Shilling Company, with credit terms of 2/10, n/30. Anders uses the perpetual inventory system. What is the journal entry...
On May 1, Shilling Company sold merchandise in the amount of $6.200 to Anders Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Shilling uses the perpetual inventory s...
Assuming a periodic inventory system, compute the cost of goods sold during the year and the ending inventory in dollars under the FIFO method. The records at the end of 2015 for the Flagstaff Comp...
Answer true or false: Under the perpetual inventory system, while recording, the transaction of purchase of merchandise inventory account should be credited.
Waupaca Company establishes a $460 petty cash fund on September 9. On September 30, the fund shows $159 in cash along with receipts for the following expenditures: Transportation-in $60 Postage exp...
State true or false and justify your answer: The periodic inventory method does not require records of the quantity and cost of individual goods.
XYZ Co. purchased $5,000 of inventory on account. Assuming that XYZ Co. uses the perpetual inventory method, which of the following entries would it make to record this transaction? a. Debit purch...
Hercula Cycles started August with 25 bicycles that cost $65 each. On August 16, Hercula bought 50 bicycles at $80 each. On August 31, Hercula sold 38 bicycles for $100 each. Journalize the August...
Two Companies sold inventory costing $25,000 on account of $35,000. The company uses a perpetual inventory system. The entry to record the transaction would include: a. A credit to gain on sale fo...
Travis Company purchased merchandise on account from a supplier for $8,400, terms 2/10, net 30. Travis Company paid for the merchandise within the discount period. Under a perpetual inventory syste...
For a firm that uses the perpetual inventory system, the sales returns and allowances account _______. (a) is not a contra account (b) is not used (c) is debited by the firm receiving returned good...
Using a perpetual inventory system, the buyer's journal entry to record the return of merchandise purchased on account includes _______. (a) credit to the cost of goods sold (b) credit to accounts...
Danton Hardware Company uses a perpetual inventory system. How should Danton record the return of inventory previously purchased on account for $200?
Garden Sales, Inc. purchased $16,000 of inventory from a supplier on account. Prepare the general journal entry to record this transaction.
Rabine Company returned $12,000 of inventory to a supplier for full credit. Prepare the general journal entry to record this transaction.
On March 1 you had 3 units of inventory at a cost of $5 each ($15). You made 2 purchases during the month. You purchased 12units at $5.20 each ($62.40) on the 2nd and you purchased 16 items at $5.2...
True or false? Even in a perpetual inventory system that updates the inventory account as and when transactions occur, the business must count inventory at least once per year.
The merchandise inventory account of a company shows a balance of $16,400 but a physical count of inventory shows $15,800. What journal entry is required to record the shrinkage? (Assume a perpetua...
The general ledger shows a balance of $45,800 in the merchandise inventory account at the end of the period, but the physical inventory count shows inventory of $43,700. What adjusting journal entr...
The merchandise inventory account of a company shows a balance of $65,000, but a physical count of inventory shows $62,000. What journal entry is required to record the shrinkage? (Assume a perpetu...
The inventory account balance is $50,000. An actual count of inventory reveals that actual inventory is $46,000. To adjust the accounts, what journal entry would the company make? Assume a perpetua...
Michelin Jewelers uses the perpetual inventory system. On April 2, Michelin sold merchandise with a cost of $5,500 for $9,000 to a customer on account with terms of 3/15, n/30. What journal entry i...
A company sold merchandise with a cost of $221 for $350 on account. The seller uses the perpetual inventory system. What journal entry is needed to record the cost of merchandise sold?
A company that uses the perpetual inventory system purchases inventory for $65,000 on account with terms of 2/10, n/30. What journal entry is needed to record the payment made within 10 days?
Merchandise inventory accounting systems can be broadly categorized into what two types? a. FIFO and LIFO b. perpetual and periodic c. wholesale and retail d. manufacturer and producer
State true or false and justify your answer: Today most large merchandising companies use a perpetual inventory system.
State true or false and justify your answer: In a perpetual inventory system, when merchandise is purchased, it is debited to an account called purchases.
State true or false and justify your answer: In a perpetual inventory system, the flow of inventory cost is first through the balance sheet and then through the income statement.
An inventory system controls the level of inventory by determining by how much to order and when to order. (a) True (b) False.
During the months of January and February, Axe Corporationpurchased goods from three suppliers. The sequence of events was asfollows: Jan. 6 Purchased goods for $1,200 fromGreen with terms 2/10, n/...
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 $7...
Ralwins, Inc. had the following balances and transactions during 2018, from January 1 to December 31: Beginning merchandise inventory 200 units at $81 March 10 Sold 100 units June 10 Purchas...
Inventory shrinkage does not include the loss of merchandise through shoplifting. A. True B. False
A perpetual inventory system: A. can reduce the price of items purchased B. is updated with each transaction C. requires the buyer to pay shipping costs D. is complete when cash is received for goo...
John Company's merchandise inventory account showed a balance of $8,400 before the year-end adjustments. The physical count of goods on hand totaled $7,800. Dave uses a perpetual inventory system....
The following transactions listed below are typical of those involving New Books Incorporated and Readers' Corner. New Books is a wholesale merchandiser and Readers' Corner is a retail merchandiser...
When a company uses a perpetual inventory system, all merchandise transactions are updated as and when they occur; so, the inventory account will show the current balance at all times. A. True B. F...
A perpetual inventory system: a. assures that a company will never run out of inventory. b. updates the inventory figures each time a transaction is made. c. lasts forever. d. requires the company...
Joe's Market makes a credit sale for $1,000 with terms of 2/10, n/30. The cost of the merchandise is $400. What is the required journal entry to record the sale and the cost of the sale?
X-Mart uses the perpetual inventory system to account for its merchandise. On May 1, it purchased $450 of merchandise on account with terms of 2/15, n/40. On May 3, X-Mart returned $50 of merchandi...
LOL Music Store uses the perpetual inventory system to account for its merchandise. On November 17, it purchased $1,000 of merchandise with terms of 2/5, n/60. If payment is made on December 21, de...
Dogs R Us uses the perpetual inventory system to account for its merchandise. On May 1, it returned $50 of merchandise due to a defect. Assuming that the purchase was originally bought on credit, d...
On December 7, Toys R Fun purchased $1,000 of merchandise with terms of 2/10, n/30. If payment is made on December 30, demonstrate the required journal entry for Toys R Fun to record the payment un...
On December 20, X-Mart received a $100 allowance because the merchandise it purchased on account earlier in the month was of poor quality. Demonstrate the required journal entry on X-Mart's books f...
On December 7, Toys R Fun purchased $1,000 of merchandise with terms of 2/10, n/30. If payment is made on December 16, demonstrate the required journal entry for Toys R Fun to record the payment un...
X-Mart purchased $300 of merchandise and paid immediately. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used.
True or false? The merchandise inventory account is increased with a debit.
A corporation has the following budgeted sales and purchases for the first four months of 2015. What is the budgeted beginning inventory balance for March 2015? | Month | Sales | Purchases | Janu...
Information related to Almond Company is presented below. 1. On 5 April, purchased merchandise from Morris Company for $30,500, terms 3/10, net/30, FOB shipping point. 2. On 6 April, paid freight c...
The following events took place for Bridger Bikes Inc. during July 20Y6, the first month of operations, as a producer of road bikes. a. Purchased $340,000 worth of materials. b. Used $329,000 of di...
How many journal entries are made in a perpetual inventory system when merchandise is sold?
If beginning inventory is $75,000, cost of goods purchased is $360,000, and ending inventory is $60,000, what is the cost of goods sold under a periodic system?
Jones Company sold merchandise on account for $90,000. This merchandise cost $52,000. The company uses the perpetual method of accounting for inventory. What would be the correct journal entry to r...
On September 13, Brady Company sold merchandise with an invoice price of $1,200 ($900 cost), with terms of 2/10, n/30, to Dalton Company. On September 17, $180 of the merchandise ($130 cost) was re...
Franklin, Inc. sold and shipped on account to Lind Stores merchandise for $2,400, with terms of 2/10, n/30. Lind Stores returned defective merchandise billed at $200 on April 20. Received from Lind...
A disadvantage to the ____ inventory system is that all inventory quantities not on hand at the end of the period are assumed to have been sold, and damaged or stolen items are not identified.
True or false: Smaller businesses invest in a periodic inventory system because of the ability to determine quantities of inventory on hand after each purchase and sale of merchandise inventory.
The effects on the accounts of recording the cost of merchandise sold for cash using a perpetual inventory system include an: a. Increase in Accounts Payable. b. Increase in Merchandise Inventory...
FFS Clothing Store sells socks. During January 2017, its inventory records for one particular brand of socks were as follows: Quantity Price per pair Total Beginning Inventory 16 pairs $18 = $288...
True or false? Under the periodic inventory system, all adjustments such as purchases, returns and allowances, and discounts are reconciled at the end of the month.
Which of the following statements is false? A. A perpetual inventory system can detect inventory shrinkage. B. A perpetual inventory system updates the inventory account for each purchase and sal...
Differentiate between perpetual inventory monitoring and periodic inventory monitoring.
Explain the recording of sales revenue under a perpetual inventory system.
Explain the recording of purchases under a perpetual inventory system.
Innovation Cycles started July with 25 bicycles that cost $65 each. On July 16, Innovation bought 50 bicycles at $80 each. On July 31, Innovation sold 41 bicycles for $97 each. Required: 1. Prepa...
On December 1, 2017, Devine Distributing Company had the following account balances. Debit ($) Credit ($) Cash 7,500 Accumulated Depreciation-Equipment 2,440 Accounts Receivable 5,400 Accounts Paya...
Prepare journal entries to record the following transactions, assuming perpetual inventory updating and first-in, first-out (FIFO) cost allocation. Assume no beginning inventory. Number of Units U...
The inventory data for an item for November are: Nov. 1. Inventory 20 units at $19 4 Sold 10 units 10 Purchased 30 units at $20 17 Sold 20 units 30 Purchased 10 units at $21 Using a perpetual syst...
The success of a perpetual inventory system depends upon __________. A. Placing an order for materials at regular intervals B. Exercising control over the issue of materials C. Recording the rec...
Howie Jewelers uses a perpetual inventory system and had the following purchase transactions. Jun. 20 Purchased inventory of $5,100 on account from Sanders Diamonds, a jewelry importer. Terms were...
Valuing Perpetuities Ghana Life Insurance Co. is selling a perpetuity contract that pays GHC 1,150 monthly. The contract currently sells for GHC 58,000. What is the monthly return on this investmen...
On January 6, Brumbaugh Co. sells merchandise on account to Pryor Inc. for $7,600, terms 4/10, n/30. On January 16, Pryor Inc. pays the amount due. Prepare the entries on Brumbaugh's books to recor...
Under the perpetual inventory system, if a purchaser returns goods that had been purchased on account, the purchaser would: a. debit inventory and credit accounts payable. b. debit accounts payab...
Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, 2012, the accounting records for the most popular item in inventory showed the follow...
At the beginning of the current season on April 1, the ledger of Kokott Pro Shop showed Cash $2,900; Inventory $3,300; and Common Stock $6,200. These transactions occurred during April 2017 Apr. 5...
During July, the following transactions occurred: July 1 Purchased $11,800 of merchandise on account July 10 Purchased $1,900 of merchandise with cash July 15 Purchased $900 of office supplies on a...
The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period ending May 31, 2014, are as follows: Date Transaction Number of Units Per Un...
Rescue Sequences LLC purchased inventory by issuing a $30,000, 10%, 60-day note on October 1. Prepare the journal entries for Rescue Sequences to record the purchase and payment assuming it uses a...
Radomir Company buys merchandise on account from Lemke Company. The selling price of the goods is $760, and the cost of the goods is $450. Both companies use perpetual inventory systems. Journalize...
Prepare the journal entries to record the following transactions on Derrick Company's books using a perpetual inventory system. (a) On March 2, Derrick Company sold $900,000 of merchandise to Rose...
Brad Company buys merchandise on account from Murray Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize...
Marquis Company uses a weighted-average perpetual inventory system. August 2, 22 units were purchased at $3 per unit. August 18, 27 units were purchased at $5 per unit. August 29, 24 units were sol...
Dino's After School sold 3 books to Sandy Mason on account for a total of $60. The total cost of the books sold was $34. a, Record the journal entries that would be made for this transaction using...
Charter Corporation, which began business in 2016, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2016 an...
The following units of an item were available for sale during the year: Beginning inventory 21,600 units at $20 Sale 14,400 units at $40 First purchase 48,000 units at $25.20 Sale 36,000 units at $...
Billy's Shirt Store purchased T-shirts on January 1 on account for $12,600. The credit terms are 2/15, n/30. Billy's paid within the discount period on January 8. Billy's sold the goods on February...
At the beginning of the current season on April 1, the ledger of Flint Hills Pro Shop showed Cash $2,500; Inventory $3,500; and Common Stock $6,000. The following transactions were completed during...
The company purchased inventory for $10,000 on December 28. The inventory purchase was not recorded until the following January 5. However, the inventory was appropriately included in the inventory...
Records of the Schwab New Products Co. show the following data relative to Product C: March 2 Inventory 325 units at $25.50 3 Sale 300 units at $37.50 6 Purchase 300 units at $26.00 13 Purchase 350...
Beginning inventory for the period was $100,000. Purchases for the period totalled $550,000 and sales were $1,000,000. A physical count of ending inventory revealed inventory of $130,000. (1) Comp...
The following inventory information is for Stevenson Company. Beginning inventory 200 units @ $8 Purchases 350 units @ $8 Ending inventory 100 units Sales for the year totaled $5,900. All sales and...
On November 6 of Year 1, the company purchased inventory (on account) from a supplier located in Indonesia. The purchase price is 100,000,000 Indonesian rupiah. On November 6, the exchange rate was...
The following transaction occurred between the Decker Company and Mann Stores, Inc., during March: Mar. 8 Decker sold $14,000 worth of merchandise ($9,600 cost) to Mann Stores with terms of 2/10, n...
Wildhorse Industries purchased $8,300 of merchandise on February 1, 2020, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $1,800 (gross price before trade or cas...
Cruise Industries purchased $10,800 of merchandise on February 1, 2014, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,500 (gross price before trade or cash...
(a) Darby sells RM 50,000 of merchandise, terms 1/10, n/30. The merchandise cost RM 30,000. (b) The customer in (a) returned RM 5,000 of merchandise to Darby. The merchandise returned cost RM 3,000...
Phambroom Company began 2010 with $35,600 in its Inventory account. During the year, it purchased inventory costing $356,800 and sold inventory that had cost $360,000 for $520,000. Based on this in...
CCO Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for April. Date Activities Units Acquired at Cost Units Sold at Retail Apr. 1 Beginnin...
Marlow Company uses a perpetual inventory system. It entered into the following calendar-year 2011 purchases and sales transactions. Date Activities Units Acquired at Cost Units Sold at Retail Jan....
Harold Co. reported the following current-year purchases and sales data for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 100 units @ $10...
Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was $214,000 at both cost and market value. At December 31, 2013, the inventory was $286,000 at cost and $265,000 at mark...
Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 250 $10 $2,500...
When a merchandiser uses a perpetual inventory system, why is it sometimes necessary to adjust the Merchandise Inventory balance with an adjusting entry?
Explain why use of the perpetual inventory system has dramatically increased.
Suppose Heat Miser Air Conditioner Company engaged in the following transactions during June of the current year: Jun 3 Purchased inventory on credit terms of 1/10 net EOM (end of the month), $1,60...
Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. Aug. 1 Purchased merchandise from Aron Company...
The following units of a particular item were available for sale during the calendar year: Jan. 1 Inventory 4,000 units at $20 Apr. 19 Sale 2,500 units June 30 Purchase 6,000 units at $24 Sept. 2 S...
Produces the same cost of merchandise sold under both the periodic and the perpetual inventory systems a. LIFO b. Weighted average c. FIFO d. None of the above
Rarely used with a perpetual inventory system a. LIFO b. Weighted average c. FIFO d. None of the above
Peggy is also concerned about lost sales while a physical inventory is being taken. Peggy is also concerned about lost sales while a physical inventory is being taken. Handy Hardware currently take...
The periodic and perpetual inventory systems share the following similarity: a. The Cost of Goods Sold account is adjusted daily as sales are made under both systems. b. The Purchases account is us...
Dover Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below: Cost Net Realizable...
The inventory records of Thimble Company show the following: March 1 Beginning inventory consists of 10 units costing USD 40 per unit. 3 Sold 5 units at USD 94 per unit. 10 Purchased 16 units...
Indicate whether the following statement is true or false. Under perpetual procedure, cost of goods sold is determined as a result of the closing entries made at the end of the period.
During the months of January and February, Axen Corporation purchased goods from three suppliers. The sequence of events was as follows: Jan. 6 Purchased goods for $4,200 from Green with terms 2/1...
A periodic inventory system would most likely be used by a(n) _____ A. automobile dealership. B. jewelry store. C. furniture store. D. local neighborhood restaurant.
Assume that you are going to open a new hobby store that specializes in model trains and radio-controlled model airplanes. Would you use a periodic or perpetual inventory system in your new busines...
Adam Nichols, a former disc golf star, operates Adam's Discorama. At the beginning of the current season on April 1, the ledger of Adam's Discorama showed Cash $1,800, Inventory $2,500, and Owner's...
Assume that a Goodyear Tire store completed the following perpetual inventory transactions for a line of tires. \\ Oct. 1 Beginning Inventory: 20 tires @ $60 Oct. 15 Purchase: 8 tires @ 75 Oct. 30...
How are sales revenues recorded under a perpetual inventory system?
How do you record purchases in a perpetual inventory system?
Barton Company uses the perpetual inventory system. The company purchased $13,000 of merchandise from Banks Company under the terms 2/10, net/30. Barton paid for the merchandise within 10 days and...
In its first month of operation, Franklin Company purchased 300 units of inventory for $7, then 500 units for $8, and finally 350 units for $9. At the end of the month, 450 units remained. Compute...
If a perpetual inventory system keeps track of inventory on a daily basis, why do companies ever need to do a physical count?
The following transactions for Goodmonth Tire Company occurred during the month of March 2003: a. Purchased 500 automobile tires on account at a cost of $40 each for a total of $20,000. b. Purchase...
Kumar Inc. uses a perpetual inventory system. At January 1, 2013, inventory was $214,000 at both cost and market value. At December 31, 2013, the inventory was $286,000 at cost and $265,000 at mark...
Waters Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, Water's ledger showed Cash of $9,615 and Common Stock of $9,615. May 1 Purchas...
ABC, Inc. uses a periodic inventory system and reported $300,000 of inventory as of December 31, 2014. Upon reviewing the company's records, the auditor noted the following items which may have bee...
Sunita Computer Supplies entered into the following transactions. May 1 Purchased merchandise on account from Anju Enterprises, $200,000. 8 Purchased merchandise for cash, $100,000. 15 Sold mercha...
Ornamental Iron Works began January with 45 units of iron inventory that cost $24 each. During January, the company completed the following inventory transactions: Units Unit Cost Unit Sale Price J...
Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Apr. 1 Sold merchandise fo...
Audio Outfitter Inc., which uses a perpetual inventory system, experienced a normal inventory shrinkage of $13,675. What accounts would be debited and credited to record the adjustment for the inve...
Beard company uses a perpetual inventory system. The company's accounting records showed the following related to June 2006 transactions. Units Cost Beginning inventory June 1 200 $600 + Purchasing...
The following information pertains to item #007SS of inventory of Marine Aquatic Sales Inc. Per unit Cost $180 Replacement cost 181 Selling price 195 The physical inventory indicates 2,000 units...
Cha Company buys merchandise on account from Wirtz Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the...
To record the sale of goods for cash in a perpetual inventory system: (a) only one journal entry is necessary to record cost of goods sold and reduction of inventory. (b) only one journal entry is...
Rachel Harpole, CEO of Bargain Den Stores, is considering a recommendation made by both the company's purchasing manager and director of finance that the company should invest in a sophisticated ne...
What types of businesses are most likely to use a perpetual inventory system?
Beginning inventory, purchases, and sales for Item B901 are as follows: January 1 Inventory 69 units @ $15 9 Sale 51 units 13 Purchase 76 units @ $18 28 Sale 23 units Assuming a perpetual i...
Ready-Set-Go Co. distributes suitcases to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of June, Ready-Set-Go's inventory consisted of suitcases costing $...
Prepare journal entries to record the following merchandising transactions of Margin Company, which applies the perpetual inventory system and the gross method of recording invoices. Margin Company...
Cumberland Company sells $2,000 worth of merchandise to Hancock Company for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entr...
Under a perpetual inventory system, the account to which transportation charges on incoming merchandise is generally entered is: A. inventory B. delivery expense C. FOB shipping D. FOB destination...
Atlas Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 3% service charge for sales on its credit card...
A seller uses a perpetual inventory system, and on April 4, it sells $5,000 in merchandise (its cost is $2,400) to a customer on credit terms of 3/10, n/30. Prepare two journal entries to record t...
Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method. Aug. 1 Purchased merchandise from Aron Company...
Custom Products, which uses a job order cost system, completed the following transactions during the current month. (a) Materials costing $65,000 were used on various jobs. (b) Time cards of direct...
Assume that on September 1 Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September these transactions occurred. Sept. 6...
Bhushan Building Supplies entered into the following transactions. June 1 Purchased merchandise on account from Brij Builder's Materials, $500,000. 3 Purchased merchandise for cash, $400,000. 5 Sol...
Hugo Reyes Company had the following account balances at year-end: Cost of goods sold $70,040; Merchandise inventory $22,410; Operating expenses $29,790; Sales $119,827; Sales discounts $1,580; and...
Slone Company sells TVs. The perpetual inventory was stated as $30,500 on the books at December 31, 2004. At the close of the year, a new approach for compiling inventory was used and apparently a...
Explain what the FISH inventory method is.
Record the following transactions for Sparky's Pet Shop, assume Sparky's uses a perpetual inventory system. August 1- Purchased $6,000 of merchandise on account, terms 2/10, n/30. August 3- Returne...
Differentiate between periodic LIFO and perpetual LIFO.
How is inventory shrinkage recorded? a. as a contra asset b. as a reduction to merchandise inventory c. as an increase to merchandise inventory d. as a separate liability account
It is discovered in 2011 that ending inventory in 2009 was understated. What is the effect of the understatement on the following: 2009: Cost of goods sold Net income Ending retained earnings. 20...
Presented is information related to Rogers Co. for the month of January 2010. Ending inventory per perpetual records: $29,710 Ending inventory actually on hand: 28,858 Cost of goods sold: 224,86...
Tattle Company engaged in the following transactions in October 2010: Oct. 7 Sold merchandise on credit to Lina Ortiz, terms n/30, FOB shipping point, $6,000 (cost, $3,600). 8 Purchased merchandis...
Dover Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below: Cost Net Realizable...
Sarah Company engaged in the following transactions in July 2010: July 1 Sold merchandise to Chi Dong on credit, terms n/30, FOB shipping point, $2,100 (cost, $1,260). 3 Purchased merchandise on cr...
Which of the following would be debited to the Inventory account for a merchandising business using the perpetual inventory system? a. Purchase of inventory. b. Allowance received for damaged inv...
Vargo Company engaged in the following transactions in August 2011: Aug. 7 Sold merchandise on credit to Ken Smith, terms n/30, FOB shipping point, $3,000 (cost, $1,800). 8. Purchased merchandise...
Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Apr. 1 Sold merchandise fo...
The following selected transactions were completed by Petunia Co. during August of the current year: Aug. 1 Purchased merchandise from Fisher Co., $8,500, terms FOB shipping point, 2/10, n/eom. Pr...
The following selected transactions were completed by Interstate Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers: Mar. 1 Sold merchandis...
Pocras Company buys merchandise on account from Wedell Company. The selling price of the goods is $900 and the cost of the goods sold is $590. Both companies use perpetual inventory systems. Journa...
On September 1, Samardo Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred....
Teramycin Inc.'s perpetual inventory records indicate that $715,275 of merchandise should be on hand on January 31, 2008. The physical inventory indicates that $698,150 of merchandise is actually o...
Retro Company's perpetual inventory records indicate that $975,000 of merchandise should be on hand on October 31, 2010. The physical inventory indicates that $894,750 of merchandise is actually on...
House of Clean Company's perpetual inventory records indicate that $375,000 of merchandise should be on hand on June 30, 2012. The physical inventory indicates that $366,500 of merchandise is actua...
Gupta Company purchased merchandise on account from a supplier for $13,200, terms 1/10, n/30. Gupta Company returned $1,700 of the merchandise and received full credit. a. If Gupta Company pays the...
Prepare the journal entries to record the following transactions on Derrick Company's books using a perpetual inventory system. a. On March 2, Derrick Company sold $900,000 of merchandise to Rose C...
Prepare the journal entries to record the following transactions on Monroe Company's books using a perpetual inventory system. a. On March 2, Monroe Company sold $900,000 of merchandise to Churchil...
Jaguar Inc.'s perpetual inventory records indicate that $584,000 of merchandise should be on hand on July 31, 2007. The physical inventory indicates that $560,000 of merchandise is actually on hand...
Indicate which of the following accounts would be included in the chart of accounts of a merchandising company using either the (a) Periodic inventory system or (b) Perpetual inventory system. I...
Iverson Tile Co.'s perpetual inventory records indicate that $675,150 of merchandise should be on hand on December 31, 2010. The physical inventory indicates that $649,780 of merchandise is actuall...
A company sold merchandise on account for $12,000. The cost of the merchandise sold was $7,200. Prepare the journal entry to record this transaction.
Goods costing $2,000 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18 a $200 credit memo is received from the supplier for damaged goods. Give the journal entry on J...
Old Faithful Tile Co.'s perpetual inventory records indicate that $715,950 of merchandise should be on hand on December 31, 2012. The physical inventory indicates that $693,675 of merchandise is ac...
Mountain Gear Inc., which uses a perpetual inventory system, experienced a normal inventory shrinkage of $21,950. What accounts would be debited and credited to record the adjustment for the inven...
Corby is in business as a retail distributor. Corby purchased goods from Smith on credit. State which of Corby's accounts should be debited and credited to record this transaction.
Brad Company buys merchandise on account of Murray Company. The selling price of the goods is $760, and the cost of the goods is $450. Both companies use perpetual inventory systems. Journalize th...
On January 1, 2010, Moxley Company had Accounts Receivable $154,000; Notes Receivable of $11,000; and Allowance for Doubtful Accounts of $13,200. The note receivable is from Hoelter Company. It is...
On July 23, Louie Company sold goods costing $3,000 on account for $4,500. The terms of the sale were n/30. Payment in satisfaction of $3,000 of this amount was received on August 17. Also on Augus...
Jordan Footwear sells athletic shoes and uses the perpetual inventory system. During June, Jordan engaged in the following transactions on its first month of operations: a. On June 1, Jordan purch...
On July 15, goods costing $7,000 were sold for $10,000 on account. The customer returned the goods before paying for them. Make the journal entry or entries necessary on the books of the seller to...
McCoy Warehouse distributes hardback books to retail stores and extends credit terms of 4/10, n/30 to all of its customers. During the month of June, the following merchandising transactions occurr...
Dawson Enterprises uses the perpetual system to record inventory transactions. In a recent month, Dawson engaged in the following transactions: a. On April 1, Dawson purchased merchandise on credi...
Health World began January with an inventory of 50 crates of vitamins that cost a total of $1,000. During the month, Health World purchased and sold merchandise on account as follows: \\ Purchase 1...
Why is the weighted average cost method called a moving average when a company uses a perpetual inventory system?
Would you expect to find a perpetual or a periodic inventory system used in each of the following situations? (a) Diamond ring department of a jewellery store (b) Computer department of a college...
The following characteristics may be related to either periodic inventory or perpetual inventory systems or both. \\ a. Purchases of inventory are journalized to an asset account at the time of pu...
Why do sales transactions under a perpetual inventory system require two journal entries?
Why are LIFO and average cost more complicated with a perpetual inventory system than with a periodic system?
What adjusting entries to Inventory are required when the perpetual inventory method is used?
On December 1, 2007 Insto Photo Company purchased merchandise, invoice price $25,000, and issued a 12%, 120-day note to Ringo Chemicals Company. Insto uses the calendar year as its fiscal year and...
In what ways are the inventory accounts of a retailing company different from those of a manufacturing company?
On September 1, 2008, Ramus Company purchased machine parts from Ho Man Tin Company for 6,000,000 Hong Kong dollars to be paid on January 1, 2009. The exchange rate on September 1 is HK$7.7 = $1. O...
On December 1, 2022, Cullumber Distributing Company had the following account balances. Debit Credit Cash $8,600 Accumulated Depreciation-Equipment $2,200 Accounts Receivable 6,000 Accounts Payable...
"Boston Dollar Store uses the gross method to record purchase discounts and uses a perpetual inventory system. Boston engaged in the following transactions during April: 4/12 Purchased $15,000 in...
Ready-Set-Go, Ltd. distributes suitcases to retail stores and extends credit terms of 1/10, n/30 to all of its customers. At the end of June, Ready-Set-Go's inventory consisted of suitcases costing...
Prepare journal entries to record the following merchandising transactions of Stone Company, which applies the perpetual inventory system. Aug. 1 Purchased merchandise from Abilene Company for $6,0...
The following transactions are for Mack Company. 1. On December 3 Mack Company sold $500,000 of merchandise to Pickert Co., terms 1/10, n/30. The cost of the merchandise sold was $320,000. 2. On...
Assume both companies use the periodic inventory system. The following transactions occurred between Gerson Pharmaceuticals and Arnold Drug Stores during June of the current year. June 6 Arnold pur...
The following transactions were selected from among those completed by Bear's Retail Store: Nov. 20 Sold two items of merchandise to Cheryl Jahn, who paid the $400 sales price in cash. The goods c...
Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Begin...
Matlock Company uses a perpetual inventory system. Its beginning inventory consists of 66 units that cost $45 each. During June, (1) the company purchased 198 units at $45 each, (2) returned 8 unit...
Assume an outlet of The Runner's Store began August 2014 with 40 pairs of running shoes that cost the store $40 each. The sale price of these shoes was $70. During August, the store completed these...
Which one of the following accounts has a regular balance in the trial balance columns of the worksheet for a manufacturing company operating under the perpetual inventory system? a) Cost of goods...
SUI sells presses. At December 31, 2011, SUI's inventory amounted to $500,000. During the first week of January 2012, the company made only one purchase and one sale. These transactions were as fol...
Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system). 1. Sold $25,000 of merchandise, that cost $19,000, on MasterCard credit...
The adjustment to record inventory shrinkage would increase Merchandise Inventory. a. True b. False
Under the perpetual inventory system, the entry to record a purchase return would include a credit to: A) Accounts Payable. B) Purchases Returns and Allowances. C) Cost of Goods Sold. D) Mercha...
Under the perpetual inventory system, in addition to making the entry to record a sales return, a company would: A) debit Merchandise Inventory and credit Cost of Goods Sold. B) make no additiona...
On January 28 Wild's Flowers purchased from a supplier 30 vases for $10 each ($300) and also paid $30 of freight under terms 2/10, n/30, FOB shipping point. The vases will be sold at its new flower...
Prepare journal entries to record the following merchandising transactions of Gore Company, which applies the perpetual inventory system. Aug. 1 Purchased merchandise from Arotek Company for $7,800...
Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the: a. customer's ledger b. creditor's ledger c. inventory ledger d. merchandise inventory ac...
Using a perpetual inventory system, the entry to record the return from a customer of merchandise sold on account includes a: a. credit to Sales Returns and Allowances b. debit to Merchandise Inv...
Prepare the journal entries to record the following transactions on Ramirez Company's books using a perpetual inventory system. a) On March 2 Ramirez Company sold $800,000 of merchandise to Ikerd...
Suppose your company sells goods for $300, of which $200 is received in cash and $100 is on the account. The goods cost your company $125 and were paid for in a previous period. Your company also r...
Powell's Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Powell's inventory consisted of books purchas...
When merchandise is returned under the perpetual inventory system, the buyer would credit: a. Merchandise Inventory b. Purchases Returns and Allowances c. Accounts Payable d. Accounts Receivable
The following information is available for the month of April. The company uses the perpetual inventory method. April 1 Inventory balance 120 units @$8.04 each April 10 Purchase 200 units @ $8.20 e...
Prepare journal entries to record the following merchandising transactions of Yarvelle Company, which applies the perpetual inventory system. May 2 Purchased merchandise from Pearl Co. for $6,600...
Olaf Distributing Company completed the following merchandising transactions in the month of April. At the beginning of April, the ledger of Olaf showed Cash of $9,000 and Common Stock of $9,000....
Using a perpetual inventory system, the entry to record the return of merchandise purchased on account includes a: a. debit to Cost of Goods Sold b. credit to Accounts Payable c. credit to Inven...
June 3 Ace purchased goods for $3200 from Diamond Inc with terms 2/10, n/30. June 5 Ace returned goods costing $1100 to Diamond Inc for full credit. June 6 Purchased goods from Club Corps for $1000...
Atlas co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 3% service charge for sales on its credit card...
A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, i...
Cyclone Co. uses the periodic inventory system. The following information about their inventory of Model XX Mountain Bicycles is available: Date Transaction Number of Units Cost per Unit 1/1 Beginn...
Segreti Corporation purchased $5,000 worth of merchandise, terms n/30, from the Zyra Corporation on June 4. The cost of the merchandise to Zyra was $3,600. On June 10, Segreti returned $700 worth...
Ehlo Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 1,000 $12 2/4 Purchase...
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