I am trying to make an adjusting entry under the periodic inventory system. The beginning balance of merchandise inventory was $123,900 and the ending balance was $134,150. I am unclear how to write the entry because inventory increased.

Merchandise Inventory 10,250
Purchases 10,250


Would this be correct?

Allowance for doubtful accounts is to be increased by P5000

Quote:

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Originally Posted by jolynnmama

I am trying to make an adjusting entry under the periodic inventory system. The begining balance of merchandise inventory was $123,900 and the ending balance was $134,150. I am unclear how to write the entry because inventory increased.

Merchandise Inventory 10,250
Purchases 10,250


Would this be correct?

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Under periodic inventory method, recording ending inventory is a part of the closing process. In your trial balance you will have accounts for the beginning inventory and purchases. Both these accounts are transferred to Income Summary. The ending inventory is credited to Income Summary and not purchases.

rhan, you just dragged up a 2 year old thread to say something having nothing to do with the original post and having no meaning. And then caused rehmanvohra to get caught in an old thread cause he wasn't paying attention. :D

None sense/.. not enough info, lol

Sigh.

The account "allowance for doubtful accounts" is applicable to aging of accounts receivables, not to adjustment of ending merchandise inventories.

The adjusting entry is:
Merchandise inventory $ 134,150
Income and expense summary $ 134,150