Question

Frigid Supplies reported beginning inventory of 230 units, for a total cost of $2,300. The company had the following transactions during the month:

Jan. 3 Sold 30 units on account at a selling price of $20 per unit. 6 Bought 40 units on account at a cost of $10 per unit. 16 Sold 40 units on account at a selling price of $20 per unit. 19 Sold 30 units on account at a selling price of $25 per unit. 26 Bought 20 units on account at a cost of $10 per unit.

31 Counted inventory and determined that 170 units were on hand.

Required:

1. Prepare the journal entries that would be recorded using a periodic inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

2. Prepare the journal entries that would be recorded using a perpetual inventory system, including any "book-to-physical" adjustment that might be needed. Tip: Adjust for shrinkage by decreasing Inventory and increasing Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

1
	No.	Date	General Journal	Debit	Credit
	6	Jan-31	Cost of Goods sold	$100
			Inventory	$500
			Purchases		$600
2
	2	Jan-03	Cost of Goods sold	$300
			Inventory		$300
			( 30 units x $10)
		Working
	Add	Beginning
		230	10	2300
	Add	Purchase
		40	20	800
		20	10	200
	Less	Ending
		170	10	1700
			COGS	1600
		Inventory
		130	10	1300
		40	20	800
		20	10	200
		190		2300