Question

1. Mariano Marina is a marina operating off the shores of South Carolina. In addition to storing boats, the owner, Rob, maintains an inventory of boats for sale. In preparation for summer and boating season, On April 1, Rob purchases 10 new boats for $7,500 each on credit. The seller offers Rob the terms 3/15, n/60, which Rob takes advantage of, paying the invoice on April 12. Rob also must pay $1,000 to transport the boats to the marina and another $500 to do any final assembly to ready them for sale.

   1. Prepare the entries Rob would make on the books of Mariano Marina if a perpetual inventory system is used.

   2. Prepare the entries Rob would make on the books of Mariano Marina if a periodic inventory system is used.

Answer 1

In case of perpetual inventory:

Date	Particulars	Debit($)	Credit($)
Apr-01	Inventory a/c	76000
	To accounts payable a/c		76000
	(being inventory purchased on credit and freight paid )
	Expenses a/c	500
	To bank a/c		500
	(being additional charges paid)

In periodic inventory system:

Date	Particulars	Debit($)	Credit($)
Apr-01	Purchases a/c	75000
	To accounts payable a/c		75000
	(being inventory purchased on credit)
	Transportation in a/c	1000
	Expenses a/c	500
	To bank a/c		1500
	(being transport and additional charges paid)