Question

A company reported beginning inventory of 100 units at a per unit cost of $25. It had the following purchase and sales transactions during the year: Jan. 14 Sold 25 units at unit sales price of $45 on account. Apr. 9 Purchased 15 additional units at a per unit cost of $25 on account. Sept. 2 Sold 50 units at a sales price of $50 on account. Dec. 31 Counted inventory and determined 35 units were still on hand. Record the month-end journal entries noted below, assuming the company uses a periodic inventory system

Answer 1

Answer:

14-Jan

Dr Trade Receivable $1,125

Cr Sales

14-jan

Dr Cost of sales 625

Cr Inventory 625

9-Apr

Dr Inventory 375

Cr Trade Payable 375

2-Sep

Dr Trade Receivable $2,500

Cr Sales $2,500

2 sep

Dr Cost of sales $1,375

Cr Inventory $1,375

Dec 31 No journal entry

Explanation:

Preparation to Records the month-end journal entries noted below, assuming the company uses a periodic inventory system

14-Jan

Dr Trade Receivable $1,125

Cr Sales (45*25)

14-jan

Dr Cost of sales[25*25] 625

Cr Inventory 625

9-Apr

Dr Inventory (25*$15) 375

Cr Trade Payable 375

2-Sep

Dr Trade Receivable $2,500

Cr Sales (50*50) $2,500

2 Sep

Dr Cost of sales $1,375

Cr Inventory $1,375

($2,500-$1,125)

Dec 31 No journal entry