Question No1: LLP sells copiers. At December 31, 2001. LLP's inventory amounted to$400,000. During the first week of January 2002, the company made only one purchase andone sale. These transactions were as follows:Purchased 50 machines from Twin, Inc. The total cost of these machines wass wasJan. 2$30,000, terms 3/10, n/60.Jan. 6Sold 20 different types of products on account to Space Corporation. The totalsales price was $25,000, terms 5/10, n/90. The total cost of these 20 units of LLPwas $13,000 (net of the purchase discount.)LLP has a full-time accountant and a computer-based accounting system. It records sales at thegross sales price and purchases at net cost and maintains subsidiary ledgers for accountsreceivable, inventory, and accounts payable.Instructionsa. Briefly describe the opening cycle of a merchandising company. Identify the assets andliabilities directly affected by this cycle.b. Prepare journal entries to record these transactions, assuming the LLP uses a perpetualinventory system in both of the books (Seller and Buyer).c. Computer the balance in the Inventory controlling account at the close of business onJanuary 6.

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Description: Question No1: LLP sells copiers. At December 31, 2001. LLP's inventory amounted to$400,000. During the first week of January 2002, the company made only one purchase andone sale. These transactions were as follows:Purchased 50 machines from Twin, In

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Question No1: LLP sells copiers. At December 31, 2001. LLP's inventory amounted to $400,000. During the first week of January 2002, the company made only one purchase and one sale. These transactions were as follows: Jan. 2 Purchased 50 machines from Twin, Inc. The total cost of these machines was $30,000, terms 3/10, n/60.

Question No1: LLP sells copiers. At December 31, 2001. LLP's inventory amounted to $400,000. During the first week of January 2002, the company made only one purchase and one sale. These transactions were as follows: Jan. 2 Purchased 50 machines from Twin, Inc. The total cost of these machines was $30,000, terms 3/10, n/60.

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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