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 $ 44,000 174,000 29,000 31,000 49,000 269,000 167,000 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.)

• 1. Record merchandise purchased on account for $174,000.

• 2. Record the payment of $29,000 in cash for freight charges.

• 3. Record merchandise returned to supplier for credit of $31,000.

• 4. Record sales on account of $269,000.

• 5. Record cost of merchandise sold of $167,000.

• 6. Record the end-of-period adjusting entry. Ending inventory is $49,000.

Answer 1

Answer: For Perpetual Inventory System: Transaction Credit Debit 174,000 174,000 29,000 29,000 31,000 Accounts Titles & Explanation Merchandise Inventory Accounts Payable Merchandise Inventory (Freight Charges) Accounts Payable Accounts Payable Merchandise Inventory Accounts Receivable Sales Revenue Cost of Goods Sold Merchandise Inventory No Entry 31,000 269,000 269,000 167,000 167,000 For Periodic Inventory System Transaction Credit Debit 174,000 174,000 29,000 29,000 Accounts Titles & Explanation Purchases Accounts Payable Purchases (Freight Charges) Accounts Payable Accounts Payable Purchases Return Accounts Receivable Sales Revenue No Entry 31,000 31,000 269,000 269,000 End of Period Adjusting Entries Under Periodic System: Transaction Credit Debit 44,000 44,000 172,000 31,000 Accounts Titles & Explanation Cost of Goods Sold Inventory (Beginning) (To close beginning Inventory to COGS) Cost of Goods Sold Purchase Returns Purchases Freight in (To close net purchases to COGS) Inventory (Ending) Cost of Goods Sold (To establish ending inventory) 174,000 29,000 49,000 49,000