Question

Sunland Company uses a perpetual inventory system. Its beginning inventory consists of 83 units that cost $56 each. During June, (1) the company purchased 248 units at $56 each on account, (2) returned 10 units for credit, and (3) sold 206 units at $83 each on account. Journalize the June transactions.

Answer 1

Item 1:

Debit : Merchandise $13,888.

Credit : Accounts Payable $13,888.

Item 2:

Debit : Merchandise $560.

Credit : Accounts Payable $560.

Item 3:

Debit : Accounts Receivable $17,098.

Debit : Cost of Sales $11,536.

Credit : Sales Revenue $17,098.

Credit : Merchandise $11,536.

What is meant by inventory system?

• A supply chain's full stock, supplies, and sales are tracked using an inventory system.
• Businesses use inventory systems to make sure they are fully aware of the goods they have on hand and where they are.

What is inventory system with example?

• All the goods, merchandise, and supplies that a company keeps on hand in anticipation of selling them for a profit are referred to as inventory.
• Example: Only the newspaper will be regarded as inventory if a newspaper vendor utilizes a vehicle to distribute newspapers to clients.
• The car will be considered an asset.

What is inventory system and methods?

• The procedures and software you employ to plan, order, store, and manage your inventory are known as inventory control methods.
• There are generally two types of inventory control  manual and perpetual.
• You must routinely perform physical counts of inventory when using manual inventory control.

What is the purpose of inventory?

• Keeping a steady supply of goods on hand for activities is inventory's primary purpose.
• Your company should look for the sweet spot between too much and too little stock, without ever running out, in order to carry out this duty efficiently.

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