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    Akhatoon's Avatar
    Akhatoon Posts: 10, Reputation: 1
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    #1

    Nov 25, 2007, 08:31 PM
    Perpetual Inventory System
    Nagle company purchased $2,500 worth of merchandise, terms n/30, from the Crafton Co on June 4. The cost of the merchandise to Crafton was $1800.
    On June 10, Nagle returned $350 worth of goods to Crafton for full credit. The goods had a cost of $225 to Crafton.
    On June 12, the account was paid in full.
    Prepare entries in journal form with explanations to record these transactions in
    a) Nagle's records
    b) Crafton's records
    Assume use of the perpetual inventory system by both companies.
    qcmar24's Avatar
    qcmar24 Posts: 65, Reputation: 3
    Junior Member
    		  
    #2

    Nov 25, 2007, 09:30 PM
    Quote Originally Posted by Akhatoon
    Nagle company purchased $2,500 worth of merchandise, terms n/30, from the Crafton Co on June 4. The cost of the merchandise to Crafton was $1800.
    On June 10, Nagle returned $350 worth of goods to Crafton for full credit. The goods had a cost of $225 to Crafton.
    On June 12, the account was paid in full.
    Prepare entries in journal form with explanations to record these transactions in
    a) Nagle's records
    b) Crafton's records
    Assume use of the perpetual inventory system by both companies.
    For a (nagle's records)

    Dr. Merchandise Inventory... 2,500
    Cr. Accounts Payable... 2,500
    -------------------------------------------------
    Dr. Accounts Payable... 350
    Cr. Merchandise Inventory... 350
    ---------------------------------------------------------
    Dr. Accounts Payable... 2,150
    Cr. Cash... 2,150
    ---------------------------------------------------------

    For b (crafton's records)

    Dr. Accounts receivable... 2,500
    Cr. Sales... 2,500
    -----------------------------------------------------
    Dr. Cost of goods sold... 1,800
    Cr. Merchandise Inventory... 1,800
    ----------------------------------------------------
    Dr.Sales returns and allowances... 350
    Cr. Accounts Receivable... 350
    ----------------------------------------------------
    Dr. Merchandise Inventory... 225
    Cr. Cost of goods sold... 225
    ----------------------------------------------------------
    Dr. Cash... 2,150
    Cr. Accounts receivable... 2,150

    Hope this could help you
    Akhatoon's Avatar
    Akhatoon Posts: 10, Reputation: 1
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    #3

    Nov 26, 2007, 07:48 AM
    Thanks a lot!! :))
    qcmar24's Avatar
    qcmar24 Posts: 65, Reputation: 3
    Junior Member
    		  
    #4

    Nov 26, 2007, 08:23 AM
    You are welcome.
    Akhatoon's Avatar
    Akhatoon Posts: 10, Reputation: 1
    New Member
    		  
    #5

    Nov 26, 2007, 08:55 AM
    Can you please help me with the periodic inventory system.. question that I posted.. Thank you!
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