Module3 ccc5 - (a) 1. The mixers should be classified as...

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Unformatted text preview: (a) 1. The mixers should be classified as inventory as Natalie will attempt to resale them. 2. A perpetual inventory system will provide better control over inventory because you are dealing with high-value items you should use this system. 3. You still need to count inventory to ensure that your records are accurate. I suggest you should count inventory monthly. (b) GENERAL JOURNAL Date Account Titles and Explanation Debit Credit Jan. 4 Merchandise Inventory........................ 2,625 Accounts Payable................................ 2,625 6 Merchandise Inventory................................. 100 Cash........................................................... 100 7 Accounts Payable [($2,625 5) + $20]........ 545 Merchandise Inventory............................ 545 8 Cash................................................................ 375 Accounts Receivable............................... 375 12 Accounts Receivable.................................... 3,150 Sales .......................................................... 3,150 12 Cost of Goods Sold [($2,625 + $100) 5 X 3]................................ 1,635 Merchandise Inventory............................ 1,635 (b) (Continued) Jan.14 Freight-Out.................................... 75 Cash............................................... 75 14Merchandise Inventory...................... 2,100 Accounts Payable......................... 2,100 17 Cash....................................................... 1,000 Common Stock............................. 1,000 18 Merchandise Inventory........................ 80 Cash............................................... 80 20 Cash....................................................... 2,100 Sales ................................................. 2,100 20 Cost of Goods Sold [($2,625 + $100) 5 X 2]....................... 1,090 Merchandise Inventory.................... 1,090 28 Wages Expense.................................... 160 Wages Payable..................................... 56 Cash.................................................. 216 28Cash ...........................................3,150 Accounts Receivable.................... 3,150 30 Accounts Payable................................. 75 Telephone Expense.............................. 70 Cash................................................... 145 31 Accounts Payable ($2,625 $545 + $2,100).................... 4,180 Cash......................................................
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This note was uploaded on 04/04/2011 for the course MNG 500 taught by Professor Linkiden during the Spring '11 term at UMass (Amherst).

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Module3 ccc5 - (a) 1. The mixers should be classified as...

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