Question

Requirement 1a. Joumalize Allegheny Tire's inventory transactions for the year under the perpetual system (Record debits first, then credits. Explanations are not required. Show all amounts in thousands) The first transaction is the purchase of inventory. Record the entry Debit December The next transaction is the sale of Inventory. Record the entry. (Do not yet record the cost related to the sale. We do this in the next journal entry) Journal Entry Date Accounts Debit Credit Accounting records December 31 (Amounts in thousands) Inventory, December 31, 2016 Purchases of inventory on account) Sales of inventory -75% on account: 25% for cash (cost $1,390) Inventory at FIFO, December 31, 2017 1.600 The last entry is recording the cost of inventory Record the entry Journal Entry Date Accounts Debit Credit Prin Dono Choose from any list or enter any number in the input fields and then continue to the next cuestion

5 total journal entries

Answer 1

Answer is given below

Credit Debit $1,600 Date Account title and explanation December 31 Merchandise inventory To Accounts payable (To record inventory purchase) $1,600 $1,875 $625 December 31 Accounts Receivable Cash To Sales (To record sales) $2,500 $1,390 December 31 Cost of Goods sold To Merchandise inventory (To record Cost of goods sold) $1,390 Date Account title and explanation December 31 Purchase To Accounts payable (To record inventory purchase) Debit | Credit $1,600 $1,600 $1,875 $625 December 31 Accounts Receivable Cash To Sales (To record sales) $2,500 Purchase of inventory the perpetual system uses the inventory account while the periodic system uses a purchases account Sale of inventory the perpetual system records two journal entries, one to record the sale and the one to update the inventory records while the periodic system only records the sales

Balance Sheet Current Assets Accounts Receivable Inventory $1,875 $820 Income Statement Sales Cost of goods sold Gross profit $2,500 $1,390 $1,110

Credit Debit $1,600 Date Account title and explanation December 31 Merchandise inventory To Accounts payable (To record inventory purchase) $1,600 $1,875 $625 December 31 Accounts Receivable Cash To Sales (To record sales) $2,500 $1,390 ($610+$1600-$820) December 31 Cost of Goods sold To Merchandise inventory (To record Cost of goods sold) $1,390 Credit Debit $1,600 Date Account title and explanation December 31 Purchase To Accounts payable (To record inventory purchase) $1,600 $1,875 $625 December 31 Accounts Receivable Cash To Sales (To record sales) $2,500 Purchase of inventory the perpetual system uses the inventory account while the periodic system uses a purchase account Sale of inventory the perpetual records journal entries, one to record the sale and the one to update the inventory records while the perpetual only records the sales

Balance Sheet Current Assets Accounts Receivable Inventory $1,875 $820 Income Statement Sales Cost of goods sold Gross profit $2,500 $1,390 $1,110