Question

The following information is available for the Johnson Corporation: Beginning inventory Inventory purchases (on account) Freight charges on purchases (paid in cash) Inventory returned to suppliers (for credit) Ending inventory Sales (on account) Cost of inventory sold $ 31,000 161,000 16,000 18,000 36,000 256,000 154,000 Required: Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. Complete this question by entering your answers in the tabs below. Perpetual System Periodic System Applying a perpetual inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list

Answer 1

Journal Entries:

Perpetual Inventory System:
Date	General Journal	Debit	Credit
1)	Inventory	$161,000
	Accounts Payable		$161,000
	(To record the purchase of inventory on account)
2)	Inventory	$16,000
	Cash		$16,000
	(To record the payment of freight charges by cash)
3)	Accounts Payable	$18,000
	Inventory		$18,000
	(To record the return of inventory purchased on account)
4)	Accounts Receivable	$256,000
	Sales Revenue		$256,000
	(To record the sales made on account)
5)	Cost of Goods Sold	$154,000
	Inventory		$154,000
	(To record the cost of goods sold)
6)	No entry is prepared for ending inventory under perpetual inventory method.
Periodic Inventory System:
Date	General Journal	Debit	Credit
1)	Purchases	$161,000
	Accounts Payable		$161,000
	(To record the purchase of inventory on account)
2)	Freight - in	$16,000
	Cash		$16,000
	(To record the payment of freight charges by cash)
3)	Accounts Payable	$18,000
	Purchase Returns		$18,000
	(To record the return of inventory purchased on account)
4)	Accounts Receivable	$256,000
	Sales Revenue		$256,000
	(To record the sales made on account)
5)	Cost of goods sold is not recorded at the time of sale under periodic inventory system.
6)	Cost of Goods Sold	$154,000
	Ending Inventory	$36,000
	Purchase Returns	$18,000
	Beginning Inventory		$31,000
	Purchases		$161,000
	Freight - in		$16,000
	(To record the adjusting entry for inventory)