Chapter 6, Problem 6.1S

LO 1

(Learning Objective 1: Show how to account for inventory transactions) Jasmine Corporation purchased inventory costing $125,000 and sold 75% of me goods for $163,750. All purchases and sales were on account. Jasmine later collected 25% of the accounts receivable. Assume that sales returns ore nonexistent.

  1.    Journalize these transactions for Jasmine, which uses the perpetual inventory system.

  2.    For these transactions, show what Jasmine wit report for inventory, revenues, and expenses on its financial statements at the end of the month. Report gross profit on the appropriate statement. Assume beginning inventory is $0.