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-   -   Perpetual Inventory System (https://www.askmehelpdesk.com/showthread.php?t=318512)

  • Feb 17, 2009, 10:18 AM
    tracyleerich
    Perpetual Inventory System
    TLC Co. uses a perpetual inventory system. In the journal provided, record the journal entries for the following transactions:
    2004
    Jul.1-Purchased $1,000 of merchandise on account. Credit terms n/30.
    Jul.6-Returned $100 of the items purchased on July 1.
    Jul.16-Sold merchandise on account for $750. The merchandise cost $350. Credit terms n/30.
    Jul.17-Of the merchandise sold on July 18, $400 of it was returned. The items had cost TLC $250
    Jul.25-Received payment in full from the customer of July 16.
    Jul.26-Purchased merchandise for cash of $2,000
    Jul.31-Paid for the merchandise purchased on July 1 less return on July 6.

    ... I am totally lost on how to do this.. Any help would be great. Thanks!
  • Feb 18, 2009, 05:37 PM
    pready

    Jul 1
    Debit Inventory for the amount
    Credit Accounts Payable for the amount

    Jul 6
    Debit Accounts Payable for the amount returned
    Credit Inventory for the amount returned

    Jul 16
    Debit Accounts Receivable for the amount of sale
    Credit Sales Revenue for the amount of sale

    Debit COGS for the amount
    Credit Inventory for the amount of COGS

    Jul 17
    Debit Sales Revenue for the amount returned
    Credit Accounts Receivable for the amount Returned

    Debit Inventory for the amount of COGS returned
    Credit COGS for the amount of COGS returned

    Jul 25
    Debit Cash for the amount owed
    Credit Accounts Receivable for the amount owed

    Jul 26
    Debit Inventory for the amount
    Credit Cash for the amount

    Jul 31
    Debit Accounts Payable for the amount owed
    Credit cash for the amount owed

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