Asked by Akwinder Chattha on May 11, 2024
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The following transactions took place during August of the current year for Roadhouse School Supplies.
August 6 Purchased merchandise on account from Abe's Papermill for $10,000.
August 8 Paid freight charges of $600 on merchandise purchased on the 6th.
August 12 Sold merchandise on account to Johnson Elementary for $2,500.
The cost of the merchandise was $500.
August 17 Received a credit memo from Abe's Papermill for merchandise returned, $1,000
August 21 Issued a credit memo to Johnson Elementary for merchandise returned, $400.
The cost of the merchandise is $150.
Journalize the above transactions using the periodic inventory system.
Periodic Inventory System
A system where inventory levels and the cost of goods sold are determined at the end of the accounting period through physical inventory counts.
Credit Memo
A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under previous transactions.
Freight Charges
Fees associated with the transport of goods from one place to another, paid by the sender or receiver.
- Understand the journal entry process for inventory transactions, including purchases, sales, and returns.
- Outline the attributes and use cases of perpetual and periodic inventory methodologies.
Verified Answer
Learning Objectives
- Understand the journal entry process for inventory transactions, including purchases, sales, and returns.
- Outline the attributes and use cases of perpetual and periodic inventory methodologies.
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