Chapter 5: Q5-25RQ (page 294)
What account is debited when recording a purchase of inventory when using a periodic inventory system?
The purchase account is debited when recording a purchase of inventory while using aperiodic inventory system.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Journalize the following sales transactions for Morris Supply. Explanations are not required.
Mar. 1 Morris Supply sold merchandise inventory for \(3,000. The cost of the inventory was \)1,800. The customer paid cash. Morris Supply was running a promotion, and the customer received a \(150 award at the time of sale that can be used at a future date on any Morris Supply merchandise.
3 Sold \)6,000 of supplies on account. Credit terms are 2/10, n/45, FOB destination. The cost of goods is \(3,600.
10 Received payment from the customer on the amount due from March 3, less the discount.
Apr. 15 The customer used the \)150 award when purchasing merchandise inventory for \(200; the inventory cost was \)120. The customer paid cash.
Journalize the following transactions that occurred in November 2018 for May’s Adventure Park. Assume May’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Nov. 4 Purchased merchandise inventory on account from Valera Company, \(8,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of \)160 on November 4 purchase.
8 Returned half the inventory purchased on November 4 from Valera Company.
10 Sold merchandise inventory for cash, \(1,700. Cost of goods, \)680. FOB destination.
11 Sold merchandise inventory to Garrison Corporation, \(10,300, on account, terms of 3/10, n/EOM. Cost of goods, \)5,150. FOB shipping point.
12 Paid freight bill of \(30 on November 10 sale.
13 Sold merchandise inventory to Cain Company, \)9,000, on account, terms of 1/10, n/45. Cost of goods, \(4,500. FOB shipping point.
14 Paid the amount owed on account from November 4, less return and discount.
18 Purchased inventory of \)3,700 on account from Regan Corporation. Payment terms were 2/10, n/30, FOB destination.
20 Received cash from Garrison Corporation, less discount.
26 Paid amount owed on account from November 18, less discount.
28 Received cash from Cain Company.
29 Purchased inventory from Sanders Corporation for cash, \(12,000, FOB shipping point. Freight in paid to shipping company, \)200.
Journalize the following transactions that occurred in February 2018 for Oceanic. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Oceanic estimates sales returns at the end of each month.
Feb. 3 Purchased merchandise inventory on account from Silton Wholesalers, \(5,200. Terms 2/15, n/EOM, FOB shipping point.
4 Paid freight bill of \)70 on February 3 purchase.
4 Purchased merchandise inventory for cash of \(1,500.
6 Returned \)900 of inventory from February 3 purchase.
8 Sold merchandise inventory to Herenda Company, \(5,600, on account. Terms 3/15, n/35. Cost of goods, \)2,352.
9 Purchased merchandise inventory on account from Teddy Wholesalers, \(7,000. Terms 1/10, n/30, FOB destination.
10 Made payment to Silton Wholesalers for goods purchased on February 3, less return and discount.
12 Received payment from Herenda Company, less discount.
13 After negotiations, received a \)500 allowance from Teddy Wholesalers.
15 Sold merchandise inventory to Jordon Company, \(3,400, on account. Terms n/EOM. Cost of goods, \)1,496.
22 Made payment, less allowance, to Teddy Wholesalers for goods purchased on February 9.
23 Jordon Company returned \(1,000 of the merchandise sold on February 15. Cost of goods, \)440.
25 Sold merchandise inventory to Smith for \(1,700 on account that cost \)663. Terms of 2/10, n/30 were offered, FOB shipping point. As a courtesy to Smith, $70 of freight was added to the invoice for which cash was paid by Oceanic.
27 Received payment from Smith, less discount.
28 Received payment from Jordon Company, less return.
Under the new revenue recognition standard, what most companies do at the end of the period related to sales returns? Describe the journal entries that would be recorded.
Journalize the following transactions for Master Bicycles using the periodic inventory system. Explanations are not required.
Nov. 2 Purchased \(3,400 of merchandise inventory under terms 2/10, n/EOM, and FOB shipping point.
6 Returned \)800 of defective merchandise purchased on November 2.
8 Paid freight bill of \(100 on November 2 purchase.
10 Sold merchandise inventory on account for \)6,100. Payment terms were 3/15, n/45.
11 Paid amount owed on credit purchase of November 2, less the return and the discount.
22 Received cash from November 10 customer in full settlement of their debt, less the discount.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
