Question

please help with B. and C.

7-2. Sale of inventory Now that New Sales has goods on hand, the company can start providing merchandise to customers. The following transactions occurred in the month of May. Complete parts a, b, and c. May 15 May 20 Sold inventory that had cost us $300 for $525 on account. Freight to get the merchandise to our customer cost us $50. Accepted a return of merchandise which was the wrong color for the customer. We had sold the merchandise for $72, our cost was $56. Shipped merchandise that had cost us $790 to a customer for $1,050. The customer agreed to pay us in 30 days. Received a check for the May 15 sale. Record the transactions above using the periodic inventory system. May 29 May 30 a. Periodic Inventory Entries: lis 1095 K Sales auts her Focal Buk ACO 819 COGS 3-2 Spg Coas Finandposes Inisher goods 5/30 Aets lec SAS

Answer 1

Perpetual Inventory entries b Credit Debit $525 $525 $50 $50 $300 $300 $72 $721 Date Account Titles and Explanations May 15 Accounts receivable Sales (To record sales on account) Freight outward Cash (To record freight incurred on sales) Cost of goods sold Merchandise Inventory (To record cost of goods sold) May 20 Sales return Accounts receivable (To record sales return) Merchandise inventory Cost of goods sold (To record reversal of cost of goods sold) May 29 Accounts receivable Sales (To record sales on account) Cost of goods sold Merchandise Inventory (To record cost of goods sold) May 30 Bank Account Receivable (To record check received from customer) $56 $56 $1,050 $1,050 $790 $790 $453 $453 c periodic inventory system needs a physical count at the end of the period for updation of inventory which is not done in perpetual inventory system Perpetual inventory system transactions are updated on regular basis and updated inventory balance is available anytime which is not available in periodic inventory system.