Chapter 5, Problem 8E

Exercise 5-8 Inventory and cost of sales transactions in T-accounts P1 P2

The following summarizes Tesla; s merchandising activities for the year. Setup T-accounts for Merchandise Inventory' and for Cost of Goods Sold. Enter each line item into one of the two T-accounts and compute the T-account balances.
Cost of merchandise sold to customers............................... $196,000
Merchandise inventory, beginning-year............................... 25,000
Cost of merchandise purchases, gross amount........................$192,500
Shrinkage on merchandise as of year-end............................. 800
Cost of transportation-in former chandise pijrchases.................... 2,900
Cost of merchandise retnned by customers and restored to inventory...... 2,100
Discounts received from suppliers on merchandise purchases...........$. 1,70O
Returns toand allowances from suppliers on merchandise purchases...... 4,000