Financial Accounting (5th Edition) (What's New in Accounting)
5th Edition
ISBN: 9780134727790
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 1SE
Inventory methods (Learning Objective 2) 5-10 min.
The following characteristics are related to periodic inventory and/or perpetual inventory systems.
- a. A physical count of goods on hand at year end is required.
- b. Inventory records are continuously updated.
- c. Purchases of inventory are recorded in an asset account at the time of purchase.
- d. Bar code scanners are often used.
- e. The cost of goods sold must be calculated at the end of the year.
Match each characteristic with one of the following:
- a. Periodic inventory
- b. Perpetual inventory
- c. Both periodic and perpetual inventory
- d. Neither periodic nor perpetual inventory
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Instructions
In this assignment you will record eight transactions related to the sale and purchase of merchandise.
You will record each transaction according to the procedures of a periodic inventory system.
You will record each transaction according to the procedures of a perpetual inventory system.
Include the date for each transaction.
Include a brief explanation for each entry similar to the sample entry example.
Please skip a line between each transaction entry.
You may use the journals provided or create your own journals. If you create your own journals they must have a date column, description column, a debit column and a credit column. You may hand write the journal entries or type them.
Transactions to Record
Sample
Ace Company issues a $200 Sales Allowance to a customer who received damaged merchandise purchased in Feb from Ace.
Mar 1
Ace Company sells merchandise totaling $1,500 on account with terms 2/15, n/30, FOB destination. Cost of goods is…
Under a perpetual inventory system
a. accounting records continuously
disclose the amount of inventory
b. increases in inventory resulting from
purchases are debited to Purchases
c. there is no need for a year-end physical
count
d. the purchase returns and allowances
account is credited when goods are
returned to vendors
P5-5B. Journalizing inventory purchases, sales, returns, and freight transactions using the
perpetual inventory system; calculating gross profit (Learning Objectives 3, 4, 5, & 6) 25-30 min.
The following transactions for Westcoast Tire Co. occurred during July:
Jul Purchased $5,500 of merchandise on account from Meridian Tire Supply. Terms, 1/15, n/45,
4 FOB shipping point. Meridian Tire Supply prepaid the $475 shipping cost and added the amount
to the invoice.
7
9
11
13
15
16
18
20
22
23
Purchased $300 of supplies on account from Office Express. Terms, 3/10, n/30, FOB
destination.
Sold $5,100 (cost, $2,800) of merchandise on account to P. Larson. Terms, 2/15, n/45, FOB
destination.
Paid $50 freight charges to deliver goods to P. Larson.
Returned $500 of the merchandise purchased on July 4 and received a credit.
Sold $900 (cost, $545) of merchandise to cash customers.
Paid for the supplies purchased on July 7.
Paid Meridian Tire Supply the amount due from the July 4 purchase in full.…
Chapter 4 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
Ch. 4 - Prob. 1DQCh. 4 - What are some reasons why a merchandiser might...Ch. 4 - Why do businesses use subsidiary ledgers?Ch. 4 - Prob. 4DQCh. 4 - How many accounts are involved in recording the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - What is the difference between a single-step and...Ch. 4 - Prob. 10DQ
Ch. 4 - Which account does a merchandiser use that a...Ch. 4 - The two main inventory accounting systems are the...Ch. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Prob. 5SCCh. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Inventory methods (Learning Objective 2) 5-10 min....Ch. 4 - Prob. 2SECh. 4 - Prob. 3SECh. 4 - Prob. 4SECh. 4 - Prob. 5SECh. 4 - Prob. 6SECh. 4 - Prob. 7SECh. 4 - Journalizing sales and return transactions...Ch. 4 - Prob. 9SECh. 4 - Prob. 10SECh. 4 - Prob. 11SECh. 4 - Prob. 12SECh. 4 - Calculating gross profit percentage and net income...Ch. 4 - Prob. 14AECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 16AECh. 4 - Prob. 17AECh. 4 - Prob. 18AECh. 4 - Prob. 19AECh. 4 - Prob. 20AECh. 4 - Prob. 21AECh. 4 - Preparing a single-step income statement (Learning...Ch. 4 - Prob. 23AECh. 4 - Prob. 24AECh. 4 - Prob. 25AECh. 4 - Prob. 26BECh. 4 - Prob. 27BECh. 4 - Prob. 28BECh. 4 - Prob. 29BECh. 4 - Prob. 30BECh. 4 - Journalizing inventory sales, returns, and freight...Ch. 4 - Prob. 32BECh. 4 - Prob. 33BECh. 4 - Prob. 34BECh. 4 - Prob. 35BECh. 4 - Prob. 36BECh. 4 - Prob. 37BECh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43APCh. 4 - Prob. 44APCh. 4 - Journalizing inventory purchases, returns, and...Ch. 4 - Prob. 46BPCh. 4 - Prob. 47BPCh. 4 - Journalizing inventory purchases, sales, returns,...Ch. 4 - Prob. 49BPCh. 4 - Prob. 50BPCh. 4 - Prob. 51BPCh. 4 - Prob. 1CECh. 4 - Continuing Problem In this problem, we continue...Ch. 4 - Continuing Financial Statement Analysis Problem...Ch. 4 - Prob. 1EIACh. 4 - Prob. 2EIACh. 4 - Prob. 1FACh. 4 - Prob. 1IACh. 4 - Prob. 1SBACh. 4 - Prob. 1WC
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