menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Journal entries using the periodic inventory system The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems uses the periodic inventory system. Jan. 2. Purchased $18,200 of merchandise on account, FOB shipping point, terms 2/15, n/30. 5. Paid freight of $ 190 on the January 2 purchase. 6. Returned $2,750 of the merchandise purchased on January 2. 13. Sold merchandise on account, $37,300, FOB destination, 1/0, n/30. The cost of goods sold was $22,400. 15. Paid freight of $215 for the merchandise sold on January 13. 17. Paid for the purchase of January 2 less the return and discount. 23. Received payment on account for the sale of January 13 less the discount. Journalize the entries to record the transactions of Air Systems Company.

BuyFindarrow_forward

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169

Solutions

Chapter
Section
BuyFindarrow_forward

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 5, Problem 5.39EX
Textbook Problem
8 views

Journal entries using the periodic inventory system

The following selected transactions were completed by Air Systems Company during January of the current year. Air Systems uses the periodic inventory system.

Jan. 2. Purchased $18,200 of merchandise on account, FOB shipping point, terms 2/15, n/30.
5. Paid freight of $ 190 on the January 2 purchase.
6. Returned $2,750 of the merchandise purchased on January 2.
13. Sold merchandise on account, $37,300, FOB destination, 1/0, n/30. The cost of goods sold was $22,400.
15. Paid freight of $215 for the merchandise sold on January 13.
17. Paid for the purchase of January 2 less the return and discount.
23. Received payment on account for the sale of January 13 less the discount.

Journalize the entries to record the transactions of Air Systems Company.

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Purchases is an activity of acquiring the merchandise inventory of a business.

Sales is an activity of selling the merchandise inventory of a business.

To Record: The purchase transactions and sales transactions under periodic inventory system.

Explanation of Solution

  • Purchases account is an expense and it is decreased the equity value by $18,200. Therefore, debit purchase account with $18,200.
  • Accounts payable is a liability and it is increased by $18,200. Therefore, credit accounts payable account with $18,200.

Record the journal entry for freight charges paid.

Journal Entry
Date Account Title and Explanation Post Ref. Debit ($) Credit ($)
January 5 Freight-In 190
Cash 190
(To record the payment of freight charges)

Table (2)

Explanation:

  • Freight-In is an expense and it is increased by $190. Therefore, debit freight-in account with $190.
  • Cash is an asset and it is decreased by $190. Therefore, credit cash account with $190.

Record the journal entry for purchase returned.

Journal Entry
Date Account Title and Explanation Post Ref.

Debit

($)

Credit

($)

January 6 Accounts Payable 2,750
Purchases Returns and Allowances 2,750
(To record the purchases return)

Table (3)

Explanation:

  • Accounts payable is a liability and it is decreased by $2,750. Therefore, debit accounts payable account with $2,750.
  • Purchases returns and allowances account is an expense and it is increased the equity value by $2,750. Therefore, credit purchases returns and allowances account with $2,750.

Record the journal entry for the sale of inventory on account.

Date Accounts and Explanation Debit ($) Credit ($)
January 13 Accounts Receivable 36,927  
 Sales Revenue   36,927 (1)
(To record the sale of inventory on account)

Table (4)

Calculate sales revenue amount.

Accounts receivable = $37,300

Sales discount percentage = 1%

Sales revenue = $37,300($37,300×1%) = $36,927 (1)

Explanation:

  • Accounts Receivable is an asset and it is increased by $36,927. Therefore, debit account receivable with $36,927.
  • Sales revenue is revenue and it increases the value of equity by $36,927. Therefore, credit sales revenue with $36,927.

Record the journal entry for delivery charges paid.

Journal Entry
Date Account Title and Explanation Post Ref. Debit ($) Credit ($)
January 15 Delivery Expense 215
Cash 215
(To record the payment of delivery charges)

Table (5)

Explanation:

  • Delivery expense is an expense and it is increased by $215

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 5 Solutions

Corporate Financial Accounting
Show all chapter solutions
add
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Elkhorn Company purchased...Ch. 5 - Sales transactions Journalize the following...Ch. 5 - Freight terms Determine the amount to be paid in...Ch. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Halm Flooring Company uses a...Ch. 5 - Asset turnover ratio Financial statement data for...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year,...Ch. 5 - Chart of accounts Monet Paints Co. is a newly...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Stylon Co., a...Ch. 5 - Purchase-related transactions Journalize entries...Ch. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Customer return and refund On December 28, 20Y3,...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Sales-related transactions Sayers Co. sold...Ch. 5 - Determining amounts to be paid on invoices...Ch. 5 - Sales-related transactions Showcase Co., a...Ch. 5 - Purchase-related transactions Based on the data...Ch. 5 - Sales tax A sale of merchandise on account for...Ch. 5 - Sales tax transactions Journalize the entries to...Ch. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 20Y9,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Gross method for sales discounts Schofield Co....Ch. 5 - Gross method for sales discounts The following...Ch. 5 - Adjusting entry for gross method The following...Ch. 5 - Discount taken in next fiscal year Using the data...Ch. 5 - Gross and net methods for sales discounts The...Ch. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Appendix Cost of goods sold and related items The...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Appendix 2 Cost of goods sold Identify the errors...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Purchase-related transactions using periodic...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Appendix PR 5-78 Purchase-related transactions...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Comprehensive Problem 2 8. Net income: 741,455...Ch. 5 - Analyze and compare Amazon.com and Netflix...Ch. 5 - Analyze Dollar General Dollar General Corporation...Ch. 5 - Compare Dollar Tree and Dollar General The asset...Ch. 5 - Analyze and compare CSX, Union Pacific, and YRC...Ch. 5 - Analyze Home Depot The Home Depot (HD) reported...Ch. 5 - Analyze and compare Kroger and Tiffany The Kroger...Ch. 5 - Analyze J. C. Penney J. C. Penney Company, Inc....Ch. 5 - Ethics in Action Margie Johnson is a staff...Ch. 5 - Purchases discount On April 18, 20Y7, Bontanica...Ch. 5 - Effect of sales discounts Sod Nomro operates...Ch. 5 - Purchases discounts and accounts payable Rustic...Ch. 5 - Determining cost of purchase The following is an...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What is a letter of credit? A bill of lading? A draft?

Foundations of Business (MindTap Course List)

Some income from capital is taxed twice. Explain.

Principles of Macroeconomics (MindTap Course List)

What is inflation and what causes it?

Principles of Microeconomics (MindTap Course List)

Certain liability and net worth items generally increase spontaneously with increases in sales. Put a check mar...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)