Perpetual Inventory System

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Periodic and Perpetual Inventory System 4.

Purchased on account merchandise for resale


Compared for P6,000; terms were 2/10,n/30.
Periodic Inventory System
When the periodic inventory method is used, all Purchases 6,000
purchases of merchandise are debited to the Accounts payable 6,000
purchases accounts. The purchase account, a
temporary account, is used only for merchandise Perpetual Inventory System
purchased for resale. Inventory 6,000
Accounts payable 6,000
Under the perpetual inventory system, the
inventory account is increased by purchases, 5. Paid freight for the P6,000 purchase; terms
transportation in and sales returns and is decreased were FOB Shipping point
by the cost of sales, purchases returns and Periodic Inventory System
allowance and purchase discounts. Freight in 200
Cash 200
1. Sold merchandise on account costing P8,000 for
P10,000; terms were 2/10, n/30; Perpetual Inventory System
Periodic Inventory System Inventory 200
Accounts Receivable 10,000 Cash 200
Sales 10,000
6. Returned merchandise costing P300 (part of the
Perpetual Inventory System P6,000 purchase)
Accounts Receivable 10,000 Periodic Inventory System
Sales 10,000 Accounts payable 300
Purchase returns and allowance 300
Cost of Goods Sold 8,000
Inventory 8,000 Perpetual Inventory System
Accounts payable 300
2. Customer returned merchandise costing P400 Inventory 300
that had been sold on account for P500 (part of the
P10,000 sale) 7. Paid merchandise purchased, refer to no. 4
Periodic Inventory System Periodic Inventory System
Sales returns and allowances 500 Accounts payable 5,700
Accounts receivable 500 Purchase discounts 114
Cash 5,586
Perpetual Inventory System
Sales returns and allowances 500 Perpetual Inventory System
Accounts receivable 500 Accounts payable 5,700
Inventory 114
Inventory 400 Cash 5,586
Cost of Goods Sold 400
8. To transfer the beginning inventory balance,
3. Received payment from customer for P250,000, to the Income Summary account.
merchandise sold above. Periodic Inventory System
Periodic Inventory System and Perpetual Income summary 250,000
Inventory System Inventory 250,000
Cash 9,310
Sales discounts 190 Perpetual Inventory System
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Accounts receivable 9,500 - No entry


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9. To record the ending inventory balance, 24 Paid Y Trading in full.
P231,500. 28 Received cash from Mr. Sebastian in full
Periodic Inventory System payment of his account.
Inventory 231,500
Income summary 231,500 Exercise 2
The following transactions were completed by
Perpetual Inventory System Addicted Enterprises during the month of March
- No entry 2019:
1 Purchased merchandise from Manila Trading
10. To adjust the ending perpetual inventory for P22,320, terms 2/10, n/30.
balance for the shrinkage during the year. 2 Returned P570 worth of defective
Periodic Inventory System merchandise to Manila Trading.
- No entry 3 Sold merchandise on account to Armando for
P10,710, terms 2/10, n/30.
Perpetual Inventory System 4 Armando returned P960 worth of defective
Cost of Goods Sold 360 merchandise.
Inventory 360 5 Sold merchandise for cash to Bobby for
P6,525.
6 Purchased office supplies on account from
EXERCISES Makati Commercial for P9,675.
7 Returned P425 worth of defective supplies to
Instruction: Give the complete journal entry Makati Commercial.
for each transactions. 8 Sold merchandise for cash to Cora for
P8,190.
Exercise 1 9 Cora returned P290 worth of defective
The Trapped Company engaged in the following merchandise.
transactions during the month of June 2019: 10 Paid Manila Trading in full.
1 Purchased merchandise on account from X 11 Sold merchandise on account to Delia for
Co. for P10,850. P14,260, terms 2/10, n/30.
2 Returned P520 worth of defective 12 Received cash from Armando in full
merchandise to X Co. payment of his account.
5 Sold merchandise on account to Ms. Tere for 14 Purchased merchandise for cash from San
P3,930. Juan Company for P20,700.
7 Sold merchandise for cash to Mr. Pangan for 15 Returned P2,450 worth of defective
P2,135. merchandise to San Juan Company.
8 Mr. Pangan returned P185 worth of defective 20 Paid Makati Commercial in full.
merchandise. 21 Received cash from Delia in full payment
9 Purchased office equipment on account from of her account.
Y Trading for P16,200.
11 Paid X Corporation in full.
14 Sold merchandise on account to Mr.
Sebastian for P5,040.
16 Mr. Sebastian returned P425 worth of
defective merchandise.
18 Received cash from Mr. Tere in full
payment of his account.
21 Purchase merchandise for cash from Z
Company.
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22 Returned P425 worth of defective


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merchandise to Z Company.

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