CPI sells computer peripherals. At December 31, year 1, CPI's inventory amounted to $700,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows. Jan.2 Purchaned 20 modema and 80 printers from Sharp. The total cost of these machines wan $45,000, terma 3/10, n/60. Jan.6 sold 30 different types of products on account to Pace Corporation. The total sales pride was $30,000, terms 5/10, n/90. The total cost of these 30 unita to CPI was $14,700 (net of the purchase discount). CPI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable. Required: b. Prepare journal entries to record these transactions, assuming that CPI uses a perpetual inventory system. c. Compute the balance in the Inventory account at the close of business on January 6. d. Prepare journal entries to record the two transactions, assuming that CPI uses a periodic inventory system.
CPI sells computer peripherals. At December 31, year 1, CPI's inventory amounted to $700,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows. Jan.2 Purchaned 20 modema and 80 printers from Sharp. The total cost of these machines wan $45,000, terma 3/10, n/60. Jan.6 sold 30 different types of products on account to Pace Corporation. The total sales pride was $30,000, terms 5/10, n/90. The total cost of these 30 unita to CPI was $14,700 (net of the purchase discount). CPI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable. Required: b. Prepare journal entries to record these transactions, assuming that CPI uses a perpetual inventory system. c. Compute the balance in the Inventory account at the close of business on January 6. d. Prepare journal entries to record the two transactions, assuming that CPI uses a periodic inventory system.
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 1MP
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