Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. Journal entries : Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements. Accounting rules for journal entries : a) To Increase balance of the account : Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. b) To Decrease balance of the account : Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. Income Statement: The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company. (a) To Prepare: The journal entries using the perpetual inventory system.

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Answer 1

Question

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

(b)

To determine

To Post: The balances and transactions.

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

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Answer 2

Question

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

(b)

To determine

To Post: The balances and transactions.

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

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Answer 3

Question

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

(b)

To determine

To Post: The balances and transactions.

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

(b)

To determine

To Post: The balances and transactions.

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

Expert Solution & Answer

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Answer 5

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

(b)

To determine

To Post: The balances and transactions.

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

Answer 6

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

Answer 7

Chapter 5, Problem 5.2BP

(a)

To determine

Perpetual Inventory System:

Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Journal entries:

Journal is the book of original entry whereby all the financial transactions are recorded in chronological order. Under this method each transaction has two sides, debit side and credit side. Total amount of debit side must be equal to the total amount of credit side. In addition, it is the primary books of accounts for any entity to record the daily transactions and processed further till the presentation of the financial statements.

Accounting rules for journal entries:

a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Income Statement:

The income statement is that financial statement which shows the net income (or loss) of the Company. In the income statement, to calculate the net income, all expenses incurred by the Company are deducted from the total revenue of the Company.

(a)

To Prepare: The journal entries using the perpetual inventory system.

Answer 8

(b)

To determine

To Post: The balances and transactions.

Answer 9

(b)

To determine

To Post: The balances and transactions.

Answer 10

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

Answer 11

(c)

To determine

To Prepare: The income statement through gross profit for the month of April, 2015.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 5 - Prob. 1Q Ch. 5 - Prob. 2Q Ch. 5 - Prob. 3Q Ch. 5 - Prob. 4Q Ch. 5 - 5. When is cost of goods sold determined in a...Ch. 5 - 6. Distinguish between FOB shipping point and FOB...Ch. 5 - 7. Explain the meaning of the credit terms 2/10,...Ch. 5 - 8. Goods costing $2,000 are purchased on account...Ch. 5 - 9. Ming Xu believes revenues from credit sales may...Ch. 5 - 10. (a) What is the primary source document for...

To Post: The balances and transactions.

To Prepare: The income statement through gross profit for the month of April, 2015.

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Chapter 5 Solutions