Question

Cambridge Technologies Inc. began 2017 with inventory of $26,000. During the year, Cambridge purchased inventory costing $105,000 and sold goods for $170,000, with all transactions on account. Cambridge ended the year with inventory $33,000 Journalize all the necessary transactions under the periodic inventory system. Requirement 1. Journalize all the necessary transactions under the periodic inventory system. (Record debits first, then credits. Explanations are not required.) First, journalize the inventory purchase. Journal Entry Accounts Debit Credit Journalize the sales transaction. Journal Entry Accounts Debit Credit

Answer 1

Journal Entry Debit Credit Accounts Inventory Purchase : Purchases a/c Creditors a/c (Inventory purchased on account) $ 1,05,000 $ 1,05,000 $ 1,70,000 Sales : Debtors a/c - Sales a/c (Credit sales made recorded) $ 1,70,000 $ 26,000 - Closing out beginning inventory: Income summary Inventory a/c (cost of beginning inventory transferred to income summary) $ 26,000 $ 33,000 - Ending Inventory adjustment: Inventory a/c Income summary (income summary is credited by amount of closing inventory) $ 33,000

$ 1,05,000 Closing out Purchases: Income summary Purchases a/c purchases transferred to Income summary) $ 1,05,000