Explanation 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. Record the journal entry for merchandise sold: Date Account Title and Explanation Debit ($) Credit ($) April 1 Accounts Receivable 3,000 Sales Revenue 3,000 (To record merchandise sales on account) Cost of goods sold 1,800 Merchandise Inventory 1,800 (To record cost of goods sold) Table (1) Description: Accounts Receivable is an asset and it is increased by $3,000. Therefore, debit account receivable with $3,000. Sales revenue is revenue and it increases the value of equity by $3,000. Therefore, credit sales revenue with $3,000. Cost of goods sold is an expense account and it decreases the value of equity by $1,800. Therefore, debit cost of goods sold account with $1,800. Merchandise inventory is an asset and it is decreased by $1,800. Therefore, credit inventory account with $1,800. Record the journal entry for sales return: Date Account Title and Explanation Debit ($) Credit ($) April 4 Sales Returns and Allowance 300 Accounts Receivable 300 (To record the sales return) Merchandise Inventory 180 Cost of goods sold 180 (To record the reversal of cost of goods sold on sales return) Table (2) Description: Sales return and allowance is an expense account and it decreases the value of equity by $300. Therefore, debit sales returns and allowances account with $300. Accounts Receivable is an asset and it is decreased by $300. Therefore, credit account receivable with $300. Inventory is an asset and it is increased by $180. Therefore, debit inventory account with $180. Cost of goods sold is an expense account and it increases the value of equity by $180. Therefore, credit cost of goods sold account with $180...

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Chapter 5, Problem 8QS

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Prepare journal entries to record the transactions of the company during the month of April using perpetual inventory system.

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Chapter 5 Solutions

Principles of Financial Accounting.

Ch. 5 - Prob. 1MCQ Ch. 5 - Prob. 2MCQ Ch. 5 - Prob. 3MCQ Ch. 5 - Prob. 4MCQ Ch. 5 - A companys net sales are 675,000, its cost of...Ch. 5 - Prob. 1DQ Ch. 5 - In comparing the accounts of a merchandising...Ch. 5 - Prob. 3DQ Ch. 5 - Prob. 4DQ Ch. 5 - How does a company that uses a perpetual inventory...

Ch. 5 - Distinguish between cash discounts and trade...Ch. 5 - Prob. 7DQ Ch. 5 - Prob. 8DQ Ch. 5 - Prob. 9DQ Ch. 5 - What is the difference between the single-step and...Ch. 5 - APPLE Refer to the balance sheet and income...Ch. 5 - Prob. 12DQ Ch. 5 - Prob. 13DQ Ch. 5 - Prob. 14DQ Ch. 5 - Prob. 15DQ Ch. 5 - QUICK STUDY Applying merchandising terms C1 P1...Ch. 5 - Identifying inventory costs Costs of 5,000 were...Ch. 5 - Prob. 3QS Ch. 5 - Question: Compute the amount to be paid for each...Ch. 5 - Recording purchases, returns, and discounts taken...Ch. 5 - Prob. 6QS Ch. 5 - Prob. 7QS Ch. 5 - Prob. 8QS Ch. 5 - Accounting for shrinkageperpetual system P3 Nix'It...Ch. 5 - Closing entries P3 Refer to QS 4-9 and prepare...Ch. 5 - Prob. 11QS Ch. 5 - Prob. 12QS Ch. 5 - Prob. 13QS Ch. 5 - Computing and interpreting acid-test ratio Use the...Ch. 5 - Prob. 15QS Ch. 5 - Contrasting periodic and perpetual systems...Ch. 5 - Prob. 17QS Ch. 5 - Prob. 18QS Ch. 5 - Prob. 19QS Ch. 5 - Prob. 20QS Ch. 5 - Prob. 21QS Ch. 5 - Prob. 22QS Ch. 5 - Prob. 23QS Ch. 5 - Prob. 1E Ch. 5 - Prob. 2E Ch. 5 - Prob. 3E Ch. 5 - Prob. 4E Ch. 5 - Recording purchases, purchases returns, and...Ch. 5 - Recording sales, purchases. and cash...Ch. 5 - Prob. 7E Ch. 5 - Inventory and cost of sales transactions in...Ch. 5 - Prob. 9E Ch. 5 - Prob. 10E Ch. 5 - Prob. 11E Ch. 5 - Impacts of inventory error on key accounts P3 A...Ch. 5 - Impacts of inventory error on key accounts P3 A...Ch. 5 - Prob. 14E Ch. 5 - Prob. 15E Ch. 5 - Prob. 16E Ch. 5 - Recording purchases, returns, and allowances...Ch. 5 - Recording sales, purchases, and cash...Ch. 5 - Prob. 19E Ch. 5 - Prob. 20E Ch. 5 - Recording estimates of future returns P6 Chico...Ch. 5 - Prob. 22E Ch. 5 - Recording sates, purchases. shipping. and...Ch. 5 - Recording purchases, sales, returns, and...Ch. 5 - Prob. 25E Ch. 5 - Preparing journal entries for merchandising...Ch. 5 - Prob. 2AP Ch. 5 - Prob. 3AP Ch. 5 - Prob. 4AP Ch. 5 - Prob. 5AP Ch. 5 - Preparing journal entries for merchandising...Ch. 5 - Prob. 2BP Ch. 5 - Prob. 3BP Ch. 5 - Prob. 4BP Ch. 5 - The following unadjusted trial balance is prepared...Ch. 5 - This serial problem began in Chapter 1 and...Ch. 5 - Prob. 1AA Ch. 5 - Prob. 2AA Ch. 5 - Prob. 3AA Ch. 5 - Prob. 1BTN Ch. 5 - You are the financial officer for Music Plus, a...Ch. 5 - Prob. 3BTN Ch. 5 - Prob. 5BTN

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