Complete the inventory value of the units sold as of the end of the year under e
ID: 2577184 • Letter: C
Question
Complete the inventory value of the units sold as of the end of the year under each of the following methods a) Average cost, b) FIFO, C Li Problem 5 (30%) Henry Company engaged in the following transactions in October Oct. 7 Sold merchandise on credit to Larry Hill, terms 2/10,n/30, FOB shipping point, $3,000 (cost, $1,800). Purchased merchandise on credit from Eagle Company, terms n/30, FOB Shipping point, $6,400. Paid Kendall Company for shipping charges on merchandise purchased on October 8, $254 Larry Hill returned some of merchandise sold to him on October 7, for Credit, $200(cost, $120), and we returned the merchandise to inventory. Received payment from Larry Hill for purchase of October 7, less credit of October 10. 8 9 10 12 INSTRUCTIONS 1. Prepare general journal entries to record the transactions, assuming the periodic inventory system is used. Prepare general journal entries to record the transactions, assuming the perpetual inventory system is used. 2.Explanation / Answer
Answer 1. Periodic Inventory Journal Entry Date Particulars Dr. Amt. Cr. Amt. 7-Oct Accounts Receivable Dr. 3,000 To Sales 3,000 (Record the Goods Sold on credit) 8-Oct Purchase Dr. 6,400 To Accounts Payable 6,400 (Records the goods purchased) 9-Oct Freight Inwards Dr. 254 To Cash 254 (Record the freight paid) 10-Oct Sales Return Dr. 200 To Accounts Receivable 200 (Record the sales return from Larry) 12-Oct Cash Dr. 2,800 Purchase Discount Dr. 56 To Accounts Receivable 2,744 (Record the amount recived) Answer 2. Perpetual Inventory Journal Entry Date Particulars Dr. Amt. Cr. Amt. 7-Oct Accounts Receivable Dr. 3,000 To Sales 3,000 (Record the Goods Sold on credit) 7-Oct Cost of Goods Sold Dr. 1,800 To Inventory 1,800 (Record the cost of Goods Sold) 8-Oct Inventory Dr. 6,400 To Accounts Payable 6,400 (Records the goods purchased) 9-Oct Inventory Dr. 254 To Cash 254 (Record the freight paid) 10-Oct Sales Return Dr. 200 To Accounts Receivable 200 (Record the sales return from Larry) 10-Oct Inventory Dr. 120 To Cost of Goods Sold 120 (Record the sales return ) 12-Oct Cash Dr. 2,800 Purchase Discount Dr. 56 To Accounts Receivable 2,744 (Record the amount recived)