May 2- Issued inv.# 913. fro sale on account to Forbes, $2000.crestview cost of
ID: 2357896 • Letter: M
Question
May 2- Issued inv.# 913. fro sale on account to Forbes, $2000.crestview cost of this inv. was $900 3- Puschasedinv. on credit terms of 3/10 n/60 from Chicosky. co. $2467 5- Soldinventory for cash $ 1077( cost $480) 5 Issued ck. # 532to purchase furniture for cash $2185 8- Collectedinterest revenue of $1775 9- Issued inv. #914 fro sale on account to Bell $5550 ( cost 2310) 10-Puchased inv. forcash $1143 issing ck # 533 12-Recieved cashfrom Forbes in full settlement of her acc. recievable fromsale on May 2nd 13- Puschased supplies onacct.from Manley, $441. terms were net end of the month 15- Sold inv. onaccount to brown issuing invoice # 915 fro $665 ( cost 240) 17-Issued credit memo, toBrown for $665 for merchandise return to us by brown . Alsoaccounted fro receipt of the inventory cost. 18- Issuedinvoice#916 for credit sale to Forbes $357 ( cost $127) 19- Recieved $5439from Bell in full settlement of its acct./recievable from May 9th.bell earned discount by paying early 20- Purchased inv. oncredit terms of net 30 from Sims $2047 22- Puschasedfurniture on credit terms of 3/10 n/60 from Chicosky $645 22 - Issued ck# 535to pay for insurance coverage debiting prepaid insurance fro$1000 24- Sold supplies to anemployee fro cash of $54which was Crestview cost. 25- Issued ck#536 to payutilities bills $453 28- Purchased inventory oncredit terms 2/10 n/30 from Manley$675 29- Returned damagaedinv. to Manley issueing a debit memofor $675 29- Sold goods on accountto Bell issing invoice# 917 for $2900( cost $ 800) 30- Issued ck# 537 to payManley in full on account from May 13th 31- Recieved cash in fullfrom Forbes on credit sale of May 18th . There was nodiscount 31- Issued ck# 538 to paymonthly salaries of $1950Explanation / Answer
In Perpetual inventory system, cost of goods sold is debited foreach sales made. In periodic system, you calculate the costof goods sold by the end of the period. May 2 Accounts receivable 2,000 Sales 2,000 Cost of goods sold 900 Inventory 900 ( For this sale, your sales price is 2,000 to the customer and yourcost of goods (that is inventory ) is 900. Perpetual keeps track ofcost of goods sold for each sale. May 3 Inventory 2,467 Accountspayable 2,467 May 5 Cash 1,077 Sales 1,077 Cost of goods sold 480 Inventory 480 5. Furniture 2,185 Cash 2,185 8. Cash 1,775 Interest revenue 1,775 9. Accounts receivable 5,550 Sales 5,550 Cost of goods sold 2,310 Inventory 2,310 10. Inventory 1,143 Cash 1,143 12. Cash 1,960 Sales discounts 40 Accounts receivable 2,000 ( Forbes paid the invoice before 10 days, so 2% discount wasprovided 2,000 * 2 % = $ 40) 13. Supplies 441 Accounts payable 441 15. Accounts receivable 665 Sales 665 Cost of goodssold 240 Inventory 240 17. Sales returns andallowances 665 Accountsreceivable 665 Inventory 240 Cost of goods sold 240 18. Accounts receivable 357 Sales 357 Cost of goods sold 127 Inventory 127 19. Cash 5,439 Sales discounts 111 Accounts receivable 5,550 ( 2% of 5,550 is 111) 20. Inventory 2,047 Accounts payable 2,047 22. Furniture 645 Accounts payable 645 22. Prepaid insurance 1,000 Cash 1,000 24. Cash 54 Supplies 54 25. Utilities expense 453 Cash 453 28. Inventory 675 Accounts payable 675 29. Accounts payable 675 Purchase returns 675 29. Accounts receivable 2,900 Sales 2,900 Cost of goods sold 800 Inventory 800 30. Accounts payable 441 Cash 441 ( End of month term does n't have any discount terms - so , nodiscounts received when paid) 31. Cash 357 Accounts receivable 357 31. Salaries expense 1,950 Cash 1,950