James Company began the month of October with inventory of $15,000. The following inventory transactionsoccurred during the month:a. The company purchased merchandise on account for $22,000 on October 12, 2018. Terms of the purchasewere 2/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shippingpoint and freight charges of $500 were paid in cash.b. On October 31, James paid for the merchandise purchased on October 12.c. During October merchandise costing $18,000 was sold on account for $28,000.d. It was determined that inventory on hand at the end of October cost $19,060.Required:1. Assuming that the James Company uses a periodic inventory system, prepare journal entries for the abovetransactions including the adjusting entry at the end of October to record cost of goods sold.2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the abovetransactions.
James Company began the month of October with inventory of $15,000. The following inventory transactions
occurred during the month:
a. The company purchased merchandise on account for $22,000 on October 12, 2018. Terms of the purchase
were 2/10, n/30. James uses the net method to record purchases. The merchandise was shipped f.o.b. shipping
point and freight charges of $500 were paid in cash.
b. On October 31, James paid for the merchandise purchased on October 12.
c. During October merchandise costing $18,000 was sold on account for $28,000.
d. It was determined that inventory on hand at the end of October cost $19,060.
Required:
1. Assuming that the James Company uses a periodic inventory system, prepare
transactions including the
2. Assuming that the James Company uses a perpetual inventory system, prepare journal entries for the above
transactions.
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