Asked by Willis Sands on May 29, 2024
Verified
Joe owns an auto parts store called Joe's Auto Care. The following transactions took place during July of the current year.
July 8 Purchased merchandise on account from Wheeler Auto for $6,000
July 10 Paid freight charges of $400 on merchandise purchases on the 8th.
July 12 Sold merchandise on account to Lancaster Auto Sales for $5,500.
The cost of the merchandise was $3,500
July 16 Received a credit memo from Wheeler for merchandise returned, $900
July 22 Issued a credit memo to Lancaster Auto Sales for merchandise returned, $1,000.
The cost of the merchandise is $550.
Journalize the above transactions using the perpetual inventory system.
Perpetual Inventory System
An inventory management method where updates to the inventory account occur continuously as transactions happen.
- Gain an understanding of the process for recording journal entries related to inventory activities, including buying, selling, and returning merchandise.
- Execute the transaction recording procedures under perpetual and periodic inventory systems.
Verified Answer
ZK
Learning Objectives
- Gain an understanding of the process for recording journal entries related to inventory activities, including buying, selling, and returning merchandise.
- Execute the transaction recording procedures under perpetual and periodic inventory systems.
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