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. First-in-First-Out method: In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The cost of merchandise sold is calculated by adding all the total cost of merchandise sold during the month. The value of the ending inventory consists of the recent purchased items. To determine: cost of merchandise sold for each sale and inventory balance as on December 31.
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. First-in-First-Out method: In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The cost of merchandise sold is calculated by adding all the total cost of merchandise sold during the month. The value of the ending inventory consists of the recent purchased items. To determine: cost of merchandise sold for each sale and inventory balance as on December 31.
Solution Summary: The author explains the perpetual inventory system that maintains the detailed records of every inventory transaction related to purchases, and sales on a continuous basis.
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.
First-in-First-Out method:
In First-in-First-Out method, the costs of the initially purchased items are considered as cost of goods sold, for the items which are sold first. The cost of merchandise sold is calculated by adding all the total cost of merchandise sold during the month. The value of the ending inventory consists of the recent purchased items.
To determine: cost of merchandise sold for each sale and inventory balance as on December 31.
Oriole Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make
entries to accrue interest except at December 31.
Nov. 1
Loaned $54,600 cash to C. Bohr on a 12-month, 8% note.
Dec. 11
Sold goods to K. R. Pine, Inc., receiving a $1,800, 90-day, 7% note.
Received a $14,400, 180-day, 6% note to settle an open account from A. Murdock.
16
31
Accrued interest revenue on all notes receivable.
Journalize the transactions for Oriole Co. (Omit cost of goods sold entries.) (List all debit entries before credit entries. Credit account titles
are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Use
360 days for calculation. If no entry is required, select "No Entry" for the account titles and enter O for the amount in the relevant debit OR credit
box. Entering zero in ALL boxes will result in the question being marked incorrect.)
Date
Account…
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Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License