A journalise the transactions for the month of

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(a) Journalise the transactions for the month of January for Wen Goh Warehouse, using a perpetual inventory system. Assume the cost of each painting sold was $15.(b) What are the advantages and disadvantages for Wen Goh Warehouse of using a perpetual inventory system as opposed to a periodic system?PROBLEM SET B 4.2Wen Goh WarehouseJuly1Inventory (50 X $15)750Accounts Payable7503Accounts Receivable (40 X $25)1,000BSB110 Workshop Solutions Semester 1 2017
4Sales1,000Cost of Sales (40 X $15)600Inventory6006Accounts Payable750Discount received ($750 X 0.01)8Cash7429Cash990Discounts allowed (1,000 x .01)10Accounts Receivable1,00017Accounts Receivable (30 X $25)750Sales750Cost of Sales (30 X $15)450Inventory45018Inventory (60 X $15)900Accounts Payable900Freight-In100Cash10020Accounts Payable150Inventory15021Cash742Discounts allowed ($750 X .01)8Accounts Receivable75022Accounts Receivable (40 X $25)1,000Sales1,00022Cost of Sales (40 X $15)600Inventory60030Accounts Payable ($900 – $150)750Cash75031Sales Returns and Allowances125Accounts Receivable125Inventory75Cost of Sales75(b) The advantages for Wen Goh Warehouse of using a perpetual inventory system as opposedto a periodic inventory system are:Inventory is constantly updated every time a purchase or sale is made. This means thatWen Goh Warehouse will be aware of when to reorder items of inventory.Cost of sales is updated every time a sale is made so interim financial statements can beprepared without having to conduct an inventory count.When Wen Goh Warehouse does conduct an inventory count (which should be at leastannually), any inventory losses can be accurately determined.Using a perpetual inventory system would be a disadvantage for Wen Goh Warehouse ifthe business does not have a suitable computer system to maintain inventory records.PSA5.6 Fontana Ltd began operations on 1 July. It uses a perpetual inventory system. During July the business had the following purchases and sales.

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