1. prepare adjusting entries for inventory2. Provide closing entries, balance sheet and income statement Merchandising Journal Entries(ADOPTED) Newton General Merchandise had the following transactions in March 2021:March 2Purchased merchandise amounting to Php 36,000. Terms: 2/10, n/30FOB shipping point. Paid the freight bill amounting to Php 4,000.Returned Php 3,000 of the merchandise purchased on March 2 becausethey were defective.Sold merchandise on account for Php 10,000. Terms 3/15, n/30. Thecost of the merchandise sold was Php 6,000.Paid the purchase made on March 2 less the return and the discount.Received Php 2,000 of the merchandise sold on March 8. The cost ofthe merchandise returned was Php 1,200.Received cash from the March 8 customer in full settlement of hisMarch 5March 8March 10March 12March 22account less the return and the discount.REQUIRED:Prepare the appropriate journal entries for both periodic and perpetual inventory systems.

Discount on purchase = (Purchase - purchase return) x discount rate = (36000-3000)*2% = 660

Answered: on General Merchandise had rchased…

Business

Accounting

on General Merchandise had rchased merchandise amoun B shipping point. Paid the frei

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: In which financial statement is the inventory account balance presented?

A: In general there are Four Major components of financial statements a) Balance Sheet b) Profit and…

Q: Can you explain in detail how you got the Inventory Remaining(units) and the total Inventory…

A: Inventory valuation refers to the process of assigning a monetary value to the inventory of a…

Q: How do you enter an adjusting entry for Inventory?

A: Inventory adjustment Fluctuation in the inventory is a serious issue for a business entity. The…

Q: Explain the 3 important types of Inventories

A: Explain the 3 important types of Inventories. 1. Direct raw material inventory 2. Work-in-progress…

Q: QUESTION 1 Merchandise inventory is classified on the balanc a. long-term asset b. current liability…

A: In business there is need of inventory without maintaining sufficient inventory business can not be…

Q: Which of the following are characteristics of a perpetual inventory system? (a). Management knows…

A: There were two types of inventory systems to record and maintain inventory. 1. Periodic…

Q: True or False Merchandise inventory is reported in the long-term assets section of the statement of…

A: Long-term assets: Long-term assets are those assets called noncurrent…

Q: What accounts would you see on a Balance Sheet and/or Income Statement, if a company had inventory?

A: The objective of the question is to identify the accounts that would appear on a company's Balance…

Q: Merchandise inventory is classified on the balance sheet as a a. current liability b. current…

A: Assets can be classified as current asset and long-term assets. Liabilities can be classified as…

Q: The Inventory account balance appearing in a perpetual inventory worksheet represents the

A: The products and materials that a company keeps on hand with the intention of reselling, producing,…

Q: What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for…

A: Inventory shrinkage: When there is a difference between inventory as per books and actual inventory…

Q: List three accounting information system (AIS) activities for transactions categorized as selling…

A: THE PURPOSE OF ACCOUNTING INFORMATION SYSTEM (AIS) IS TO COLLECT , STORE AND PROCESS FINANCIAL AND…

Q: 9. An inventory accounting policy that should be disclosed in a summary of significant accounting…

A: It is a footnote that accompany company financial statements. Such disclosure should form part of…

Q: Differentiate between perpetual and periodic Inventory system.

A: Under the perpetual inventory system, every single movement of the inventory traces as and when they…

Q: 4. Which of the following accounts are used when recording a purchase?

A: 1. If Cash purchase: If the purchase is made out of cash, both cash and inventory accounts are used…

Q: his account is used to recognize the cost of an inventory that is sold as expens

A: Solution: When inventory is sold, then this cost should be transferred to Cost of goods sold…

Q: How is merchandise inventory classified on the balance sheet and what is its normal balance of…

A: Merchandise inventory is a current Asset as it is expected to be sold within 12 months from the…

Q: Larkspur Golf Stores, Inc. operates a chain of golf equipment stores in the Western United States.…

A: Journal is the book of original entry in which all the transactions of the business are recorded…

Q: The two main inventory accounting systems are the a. perpetual and periodic. b. purchase and sale.…

A: Purchase and sale are the transaction made by the company. It is not an inventory system. Returns…

Q: 2. Which financial statement would users find these inventory accounts?

A: As per the guidelines, only one question is allowed to be answered. Please upload different…

Q: Required information [The following information applies to the questions displayed below.] A company…

A: Evaluating Net Realizable Value is essential for proper financial reporting because it prevents…

Q: The inventory that continually discloses the amount of inventory on hand is called: a) specific…

A: a) Under specific identification method, inventory is counted at the end of the period physically…

Q: When recording a purchase of inventory on credit, which accounts are typically affected? A) Debit…

A: When assets or expenses increases it should be debited and when decreases it should be…

Q: The inventory is added to the inventory records after three documents are reconciled. One of those…

A: To add the inventory to the inventory records, the documents are reconciled which records the…

Q: an entry for a purchase return will include a. a debit to inventory b. a debit to sales returns and…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: system perpetual physical etail periodic

A: Physical inventory system has a fixed schedule to manually and physically count the items of…

Q: Briefly explain the accounting treatment for sales returns and allowances. Where are these accounts…

Q: Understand and apply rules for measurement of inventory at the end of the reporting period.

Q: Describe in words the journal entries that are made ina perpetual inventory system when inventory is…

A: Perpetual inventory system provides a running balance of cost of goods available for sale and cost…

Q: The following account appears on which financial statement: Inventory 1. Balance Sheet 2. Income…

A: The income statement and balance sheet are the important financial statements of the business. The…

Q: When recording a purchase of inventory on credit, which of the following correctly identifies the…

A: The objective of this question is to identify the correct debit and credit entries when recording a…

Q: What inventory accounts are used by a manufacturer? In what financial statement will appear?

A: An inventory account or merchandise inventory account is an account to record the inventory…

Q: In accounting what is meant by the term 'purchases'? Select one: OA. All good purchased and paid…

A: INTRODUCTION: The recorded transaction must be gathered, categorized, and summarised. Accounting is…

Q: Define the term inventory shrinkage. How is the amount of inventory shrinkage determined in a…

A: Inventory Shrinkage refers to that amount of inventory which is in excess and listed in the…

Q: Explain how the sale of inventory on account is recorded under a periodic system. How does this…

Q: Crane Corporation was organized on January 1, 2027. It is authorized to issue 19,800 shares of 7%,…

A: Let's break down the exchanges and their affect on the company's accounts: 1. **January 10:**- Crane…

Q: Describe the journal entry(ies) when recording a sale of inventory using the periodic inventory…

A: In a periodic Inventory system, the entries are made in the system at the end of the accounting…

Q: Is purchases is the account to be debited upon purchase of merchandise under the perpetual inventory…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Question

1. prepare adjusting entries for inventory

2. Provide closing entries, balance sheet and income statement

Merchandising Journal Entries
(ADOPTED) Newton General Merchandise had the following transactions in March 2021:
March 2
Purchased merchandise amounting to Php 36,000. Terms: 2/10, n/30
FOB shipping point. Paid the freight bill amounting to Php 4,000.
Returned Php 3,000 of the merchandise purchased on March 2 because
they were defective.
Sold merchandise on account for Php 10,000. Terms 3/15, n/30. The
cost of the merchandise sold was Php 6,000.
Paid the purchase made on March 2 less the return and the discount.
Received Php 2,000 of the merchandise sold on March 8. The cost of
the merchandise returned was Php 1,200.
Received cash from the March 8 customer in full settlement of his
March 5
March 8
March 10
March 12
March 22
account less the return and the discount.
REQUIRED:
Prepare the appropriate journal entries for both periodic and perpetual inventory systems.

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1a The inventory cost flow method that reports the earliest costs in ending inventory is a. LIFO b. weighted average cost c. FIFO d. specific identification
3. Journalize the summary transactions (a) through (d). If an amount box does not require an entry, leave it blank. Raw and In Process Inventory а. Accounts Payable b. 3. 4. Sale 4. Cost
Which of the following items is considered an original source document? Select one: a. accounts receivable b. company expense account c. purchase order d. general ledger
Describe the journal entries when recording a sale of inventory using the periodic inventory system.
The Inventory account is used in each of the following except the entry to record payment of freight on goods sold. goods purchased on account. the return of goods purchased. payment within the discount period.
Subject: acounting
Which of the following items appear on the same side of the trial balance? Drawings and accruals В Carriage outwards and prepayments Carriage inwards and rental income Opening inventory and purchase returns
3. On January 1, 2018, Hina Company acquired as a long-term investment a 20% ordinary share interest in Shivani Company. Hina paid P7, 000,000 for this investment when the fair value of Shivani’s net assets was P35, 000,000. Hina can exercise significant influence over Shivani’s operating and financial policies. For the year ended December 31, 2018, Shivani reported net income of P4,000,000 and declared and paid cash dividends of P1,600,000. How much revenue from the investment should Hina report for 2018? 4. On July 1, 2018, Melanie Company purchased 30,000 shares of Eagle Company’s 100,000 outstanding ordinary shares for P200 per share. On December 15, 2018, Eagle paid P400,000 in dividends to its ordinary shareholders. Eagle’s net income for the year ended December 31, 2018 was P1,200,000, earned evenly throughout the year. In its 2018 income statement, what amount of income from the investment should Denver report? 5. Savannah Company bought 40% of Diarra Company’s…
2) Sea Travel sells motor boats. One of Sea Travel's most popular models is the Wing. During the current year, Sea Travel purchased 24 Wings at the following costs. Total cost Unit Cost $7000 $7100 $7250 Purchase Date Units Purchased May 2 May 20 May 25 $28,000 14,200 4 8 58000 June 5 10 $7300 73000 24 $173,200 On May 28, Sea Travel sold 11 Wings to the jack Sport racing team. Compute a) the cost of goods sold on May 28 and b) The ending inventory of Wing boats at June 5, using the following cost flow assumptions: c) Prepare journal entries to record the cost of the 11 wings sold on May 28, assuming that the company uses the:
2.The __________ method and the __________ method are the two common approaches to record inventory in financial statements.
Inventory is recorded in the statement of financial position of an entity. What king of inventory is recorded in the statement of financial position opening inventory closing inventory average of the opening and closing inventory higher of the opening or closing inventory