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Inventory Systems and Calculating Revenues, Expenses, and Income
Angela Allison
ACC/225
March 25, 2011
Jose Rodriguez
Inventory Systems and Calculating Revenues, Expenses, and Income
QS 5-8A
Identify whether each description best applies to a periodic or a perpetual inventory system.
a. Provides more timely information to managers. (Perpetual)
b. Requires an adjusting entry to record inventory shrinkage. (Periodic)
c. Markedly increased in frequency and popularity in business within the past decade. (Perpetual)
d. Records cost of goods sold each time a sales transaction occurs (Perpetual)
Exercise 5-9
a b c d e
Sales . . . . . . . . . . . . . . . . . . . . . . . . . $60,000 $42,500 $36,000 $78,000 $23,600
Cost of goods sold
Merchandise inventory (beginning) $6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases $36,000 ?1,550 ?33,750 32,000 5,600
Merchandise inventory (ending) . . . . ?(7,950) (2,700) (9,000) (6,600) ?(2,560)
Cost of goods sold . . . . . . . . . . . . . . . $34,050 15,900 ?32,250 ?32,400 5,600
Gross profit . . . . . . . . . . . . . . . . . . . . .?25,950 ?26,600 3,750 45,600 ?18,000
Expenses . . . . . . . . . . . . . . . . . . . . . . .$9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . . . . $16,950 $15,950 $(8,400) $43,000 $12,000
Exercise 5-13
Periodic Journal
2010
Nov 1 Purchases 1400
Accounts payable 1400
5 Accounts payable 1400
Purchase discounts 28
Cash 1372
7 Cash 100
Purchase returns and
Allowances 100
Accounts payable
10 Transportation 80
Cash 80
13 Accounts receivable 1500
Sales 1500
16 Sales returns and allowances 200
Accounts receivable 200
Perpetual Inventory Journal
1 Merchandise Inventory...