Question

periodic and perpetual

E8.5 Using perpetual inventory procedures, journalize the following transactions for Jessica's Gift Shop for April. Assume Jessica uses the net price method of recording merchandise purchases. April 4 April 8 Jessica purchased $20,500 of merchandise from Parker Company; terms 2/10, n/30. Jessica returned $1,200 of damaged merchandise purchased on April 4 to Parker Company and Parker Company will decrease Jessica's bill accordingly. Jessica paid Parker Company for the purchase and took advantage of the cash discount. April 12 E8.6 Refer to E8.5. Make the journal entries assuming Jessica uses the gross price method. E8.7 Refer to E8.5. Make the journal entries assuming Jessica uses a periodic inventory system and the net price method. E8,8 Refer to E8.5 and E8.6. Make the journal entries assuming Jessica uses a periodic system and the gross price method. E8.9 Refer to E8.5. Assuming Jessica uses perpetual procedures and the net price method, determine the effect of each of the events on the accounting equation.

how do you do this

Answer 1

E8.5)

Journal Entries under Perpetual Inventory Method:

Date	Account Titles and Explanations	Debit	Credit
Apri. 4	Merchandise Inventory ($20,500 - [$20,500*2/100])	$20,090
	Accounts Payable - Parker Company		$20,090
	(To record the purchase of merchandise inventory on account)
Apri. 8	Accounts Payable - Parker Company ($1,200 - [$1,200*2/100])	$1,176
	Merchandise Inventory		$1,176
	(To record the return of merchandise inventory purchased on account)
Apri. 12	Accounts Payable - Parker Company ($20,090 - $1,176)	$18,914
	Discount Received ($20,500*2/100 - $1,200*2/100)		$386
	Cash ($19,300 - $386)		$18,528
	(To record the payment for the credit purchase along with receipt of discount)

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