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Question

Accounting records for Richard Corporation yield the following data for the year

ended December 31,

20X6:


LO 2 4


LO 1 2


Inventory, December 31, 20X5 ................................................................ $ 9,000

Purchases of inventory (on account)......................................................... 48,000

Sales of inventory—79% on account; 21% for cash (cost $41,000).........

Inventory at FIFO, December 31, 20X6...................................................

77,000

16,000


Requirements

1. Journalize Richard's inventory transactions for the year under the perpetual system.

2. Report ending inventory, sales, cost of goods sold, and gross profit on the appropriate

financial statement.

Top Answer

1) Under perpetual system of journalising each sale/purchase entry is updated along with the... View the full answer

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Particulars
Debit ($)
Credit ($)
Inventory A/c
48000
Accounts payables A/c
48000
(Being inventory purchased on account)
Accounts receivable A/c
60830
Inventory A/c
60830
(Being 79% of inventory...

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