Prepare the journal entries to record the above transactions by using the following: 1. Perpetual inventory system 2. Periodic inventory system
Prepare the journal entries to record the above transactions by using the following: 1. Perpetual inventory system 2. Periodic inventory system
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The ABC merchandise Company has the following transactions:
May 01: The Company purchased 5 units of inventory on account at a cost of $500 each.
May 04: sold 4 units of inventory on account at a price of $800 each.
May 05: Purchased an additional 6 units on account at a cost of $500.
May 07: Paid $2500 against purchases to supplier of inventory.
May 08: Sold 5 units of inventory for cash at a sale price of $850.
May 10: Collected $3200 from the customer against the credit sales on May 04.
Requirement: Prepare the
1. Perpetual inventory system
2. Periodic inventory system
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