Perpetual and Periodic Systems—Recording Inventory-Related Entries using the Gross MethodThe following transactions are from Sharper Vision Corporation.Purchased inventory on December 10, 2020, with a list price of $2,250, a trade discount of 20%, and with terms 2/10, n/30.Returned $300 of inventory to the supplier on December 15, 2020.Paid $1,200 cash on account on December 19, 2020.Paid the remaining balance on January 5, 2021. Perpetual inventory systemPeriodic inventory systema. Prepare journal entries for the transactions 1 through 4, assuming that the company uses the perpetual inventory system and the gross method for recording purchase discounts.DateAccount NameDr.Cr.Dec. 10, 2020AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswer AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswerDec. 15, 2020AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswer AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswerDec. 19, 2020AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswer AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswer CashAnswerAnswerJan. 5, 2021AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswer AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/AAnswerAnswerPlease answer all parts of the question.PreviousSave AnswersNext Copyright 2020 Cambridge Business Publishers , All Rights Reserved | Terms of Use | Privacy Policy | Return Policy | User Guide | Browser Support

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Description: Perpetual and Periodic Systems—Recording Inventory-Related Entries using the Gross MethodThe following transactions are from Sharper Vision Corporation.Purchased inventory on December 10, 2020, with a list price of $2,250, a trade discount of 20%, an

The gross method is the one in which the purchases are recorded at full value without deducting the…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Perpetual and Periodic Systems—Recording Inventory-Related Entries using the Gross Method

The following transactions are from Sharper Vision Corporation.

Purchased inventory on December 10, 2020, with a list price of $2,250, a trade discount of 20%, and with terms 2/10, n/30.
Returned $300 of inventory to the supplier on December 15, 2020.
Paid $1,200 cash on account on December 19, 2020.
Paid the remaining balance on January 5, 2021.

Perpetual inventory system
Periodic inventory system

a. Prepare journal entries for the transactions 1 through 4, assuming that the company uses the perpetual inventory system and the gross method for recording purchase discounts.

Date	Account Name	Dr.	Cr.
Dec. 10, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
Dec. 15, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
Dec. 19, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	Cash	Answer	Answer
Jan. 5, 2021	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer

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