Question

please help with A. B. and C.

asking you to record the following events. Complete parts a, b, and c. Our Stuff managers also want you to provide information about the sale of inventory. They are Sale of inventory me 7 Sold inventory that had cost us $800 for $1,000 on account to Smith. Freight to get the merchandise to our customer was paid by the customer. Accepted a return of merchandise from the June 7 sale to Smith that was the wrong size for the customer. We had sold the merchandise for $300; our cost was June 13 $240. June 20 Shipped merchandise that had cost us 5940 to Jones. New Stuff billed the customer S1,175 on the sale and paid $25 in freight to get the merchandise to the customer. June 30 Received a check for the Smith June 7 sale. Record the transactions above using the periodic inventory system. 2 Periodic Inventory Entries: 10 land W7 Sales 713 Sales Returns Aces Ree 720 Taught 200 las THE

Answer 1

a. Periodic system:

Date	Accounts	Debit	Credit
June 7	Accounts receivable	1000
	Sales revenue		1000
June 13	Sales returns and allowances	300
	Accounts receivable		300
June 20	Freight out	25
	Cash		25
	Accounts receivable	1175
	Sales revenue		1175
June 30	Cash	700
	Accounts receivable		700

b. Perpetual system

Date	Accounts	Debit	Credit
June 7	Accounts receivable	1000
	Sales revenue		1000
	Cost of goods sold	800
	Inventory		800
June 13	Sales returns and allowances	300
	Accounts receivable		300
	Inventory	240
	Cost of goods sold		240
June 20	Freight out	25
	Cash		25
	Accounts receivable	1175
	Sales revenue		1175
	Cost of goods sold	940
	Inventory		940
June 30	Cash	700
	Accounts receivable		700

c. Periodic inventory systems help the business know the exact opening and closing stock level at the beginning and end of the accounting periods which is not possible through perpetual inventory system. On the other hand using perpetual inventory system the business can maintain minimum and maximum levels of inventory by analyzing the approrpiate time of purchase.