Periodic_vs._Perpetual

Periodic_vs._Perpetual - 350 Purch. Ret/Allw. 4 Discount...

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Chapter 5 Example of Periodic Versus Perpetual Inventory The following transactions have occurred: 1 Yak Company purchased 100 phones on account for its invty from Song Company for $35 each, with terms 2/10 net 30. 2 Yak paid the freight company $500 because the shipping terms were FOB shipping point. 3 Yak returned 10 phones and received full credit from Song. 4 Yak Received a purchase discount of 2% for paying within 10 days of receiving the invoice. 5 Yak sold 50 phones for cash during the period for a sales price of $4750. Transaction: Journal Entry-Perpetual System Journal Entries-Periodic System 1 Purchase Inventory 3500 Purchases 3500 A/P 3500 A/P 2 Freight Inventory 500 Freight-in 500 Cash 500 Cash 3 Return A/P 350 A/P 350 Inventory
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Unformatted text preview: 350 Purch. Ret/Allw. 4 Discount A/P 3150 A/P 3150 Cash 3087 Cash Invty 63 Purch Discount 5 Sale Cash 4750 Cash 4750 COGS 1993 Sales Rev Sales Rev 4750 Invty 1993 Additional Entries for Periodic (closes out temporary accounts) Calculation of Periodic COGs and Endg Invty Inventory 1594 Beg Invty- COGS 1993 Purchases 3,500 Purch Ret/Allw. 350 (Purch Returns) (350) Purch Discounts 63 (Purch Discounts) (63) Purchaces Freight 500 Freight-in Goods Available for Sale 3,587 Less Endg Invty (1,594) Cost of Goods Sold 1,993 **At the end of the period, a physicial count of invty was taken and 40 phones were present and valued at $ 1594 3500 500 350 3087 63 4750 3500 500...
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Periodic_vs._Perpetual - 350 Purch. Ret/Allw. 4 Discount...

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