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. Trial balance : Trial balance is a statement prepared to show all the year-end account balances of a business. The balances are shown in separate columns as debit and credit. Trial balance is made to check whether books of accounts of the business are arithmetically accurate. (a) To Prepare: The journal entries using the perpetual inventory system for the month of April.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 5.4BP

(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.

Trial balance:

Trial balance is a statement prepared to show all the year-end account balances of a business. The balances are shown in separate columns as debit and credit. Trial balance is made to check whether books of accounts of the business are arithmetically accurate.

(a)

To Prepare: The journal entries using the perpetual inventory system for the month of April.

(b)

To determine

To Post: The beginning balances and the transactions of April month in the ledger accounts.

(c)

To determine

To Prepare: A trial balance as on April 30, 2015.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

QUESTION 1 Rentokil Limited issued a 10-year bond on January 1 2011. It pays interest on January1. The below amortization schedule and interest schedule reflects this. Its year end isDecember 31. Requirements: a) Indicate whether the bonds were issued at a premium or a discount and explainhow you came to your decision. b) Compute the stated interest rate and the effective interest rate c) Prepare the journal entries for the following years:I. 2011, 2012 & 2018.

Blueberry Corp. plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 65 to 45, as well as reduce the ratio of credit sales to total revenue from 80% to 70%. The company estimates that projected sales will be 8% less if the proposed new credit policy is implemented. The firm’s short-term interest cost is 8%. Projected sales for the coming year are $32,000,000. Assuming a 360-day year, calculate the dollar impact on accounts receivable of Blueberry Corp. of this proposed change in credit policy.

Crane Company accumulates the following data concerning a mixed cost, using units produced as the activity level. Units Produced Total Cost March 9,970 $20,005 April 8,930 18,154 May 10,500 20,538 June 8,710 17,674 July 9,370 18,604 Using the information from your answer to above part, write the cost equation. (Round per unit produced answer to 2 decimal places (e.g., 2.25).) +A +$ per unit produced × Total cost