The following information is available for the Johnson Corporation: Beginning inventory Inventory purchases (on account) Freight…
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Question “The following information is available for the Johnson Corporation: Beginning inventory Inventory purchases (on account) Freight…”
The following information is available for the Johnson Corporation: Beginning inventory Inventory purchases (on account) Freight charges on purchases (paid in cash) Inventory returned to suppliers (for credit) Ending inventory Sales (on account) Cost of inventory sold $ 31,000 161,000 16,000 18,000 36,000 256,000 154,000 Required: Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. Complete this question by entering your answers in the tabs below. Perpetual System Periodic System Applying a perpetual inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list
Perpetual System Periodic System Applying a perpetual inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list 1 Record merchandise purchased on account for $161,000. 2 Record the payment of $16,000 in cash for freight charges. 3 Record merchandise returned to supplier for credit of $18,000. 4 Record sales on account of $256,000. Credit 5 Record cost of merchandise sold of $154,000. 6 Record the end-of-period adjusting entry. Ending inventory is $36,000. Note : = journal entry has been entered
Perpetual System Periodic System Applying a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list 1 Record merchandise purchased on account for $161,000. 2 Record the payment of $16,000 in cash for freight charges. 3 Record merchandise returned to supplier for credit of $18,000. 4 Record sales on account of $256,000. Credit 5 Record cost of merchandise sold of $154,000. 6 Record the end-of-period adjusting entry. Ending inventory is $36,000. Note : = journal entry has been entered
Answer
Journal Entries
Perpetual Stock System: | |||
Date | General Journal | Debit | Credit |
1) | Inventory | $161,000 | |
Accounts payable | $161,000 | ||
(To account for inventory purchases) | |||
2) | Inventory | $16,000 | |
Cash | $16,000 | ||
(To pay freight charges in cash) | |||
3) | Accounts payable | $18,000 | |
Inventory | $18,000 | ||
(To track inventory returned to account) | |||
4) | Receivables | $256,000 | |
Sales Revenue | $256,000 | ||
(To track the sales on an account) | |||
5) | Selling price of goods | $154,000 | |
Inventory | $154,000 | ||
(To keep track of the price of goods sold) | |||
6) | Ending inventory using perpetual inventory is not possible. | ||
Periodic Inspection System: | |||
Date | General Journal | Debit | Credit |
1) | Purchases | $161,000 | |
Accounts payable | $161,000 | ||
(To account for inventory purchases) | |||
2) | Freight – in | $16,000 | |
Cash | $16,000 | ||
(To pay freight charges in cash) | |||
3) | Accounts payable | $18,000 | |
Buy Returns | $18,000 | ||
(To track inventory returned to account) | |||
4) | Accounts Receivable | $256,000 | |
Sales Revenue | $256,000 | ||
(To track the sales on an account) | |||
5) | Under the periodic inventory system, the cost of goods sold does not get recorded at time of sale. | ||
6) | Selling price of goods | $154,000 | |
Ending Inventory | $36,000 | ||
Buy Returns | $18,000 | ||
Beginning Inventory | $31,000 | ||
Purchases | $161,000 | ||
Freight – in | $16,000 | ||
(To record inventory adjustments) |
Conclusion
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