Unformatted text preview: (a) Develop journal entries for each of the following representative transactions, to show how the they would be handled with a periodic (gross and net) vs. perpetual system (gross and net). #1 Purchased $55,000 of balls on account, F.O.B. destination, terms 2/10, n/30. #2 Paid the amount due for the preceding purchase within the discount period. #3 Sold golf balls for $80,000 on account, F.O.B. shipping point, freight-collect, terms 1/10, n/30. The balls had a net cost of $39,300. (b) Using the representative transactions, show how cost of goods sold is measured under the alternative systems. Assume Big Swing had a beginning inventory of $21,000....
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- Spring '11
- Accounting, golf balls, advertising company, rapidly growing speciality, Big Swing Sales, manual perodic inventory