Panasonic Inc is an office supply store selling computers. The company uses a perpetual inventory system. a.) Record the following transactions in the company's general journal, include the written explanations accompany the entries. June 1 Purchased 40 units of computers on account from Good Corp. with invoice price of $4,000 each, terms of 3/15, n/30. Return 3 faulty unit of computer to Good Corporation. 12 3 14 19 Sold 7 units of computers to Adventure. The sales price was $8,000, terms 2/10, n/30. Good Corporation received full payment from Panasonic Inc. Adventure paid a check in full settlement. b.) Explain the effect on operating income and ending inventory values if a firm uses LIFO instead of FIFO in times of rising prices.

Panasonic Inc is an office supply store selling computers. The company uses a perpetual inventory system. a.) Record the following transactions in the company's general journal, include the written explanations accompany the entries. June 1 Purchased 40 units of computers on account from Good Corp. with invoice price of $4,000 each, terms of 3/15, n/30. Return 3 faulty unit of computer to Good Corporation. 12 3 14 19 Sold 7 units of computers to Adventure. The sales price was $8,000, terms 2/10, n/30. Good Corporation received full payment from Panasonic Inc. Adventure paid a check in full settlement. b.) Explain the effect on operating income and ending inventory values if a firm uses LIFO instead of FIFO in times of rising prices.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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