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Homework answers / question archive / Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated
Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated. Assume a perpetual inventory system is in use. Buyer: Purchase of $3,990 of inventory for cash Buyer: Return of $855 ot inventory to seller for credit on account, 3. Buyer: Purchase of $4,560 of inventory on account, terms 2/10, 1/45. Buyer: Payment of $490 cash for freight on purchase of inventory (FOB shipping point) 5. Buyer: Payment of amount owed for purchase of $3.990 of inventory,terms 2/10, 1/30, paid within discount period. Seller: Sate of inventory on account terms /30. Selling price $20,000, cost $8.000. Management expects a return rate of Seller: Return of damaged Inventory from buyer for cash. Selling price $610; cost $261. All of the goods were discarded because they are not resaleable. Seller: Payment of $650 cash for freight on sale of inventory (FOB destination), Seller: Return of unwanted inventory from buyer for credit on account. Selling price 5490 cost $179. Goods restored to inventory for future resale. 10 Seller: Receipt of payment (59,120) from customer on account, terms 1/30. 6. 7,69% 7 8 9. For each of the above transactions, indicate (a) the basic type (asset, liability, revenue, or expense) of each account to be debited and credited: (b) the specific name(s) of the account(s) to debit and credit (for example, Inventory); and (c) whether each account is increased (+) or decreased (-) and by what amount. The first one has been done for you as an example. (Enter specific debited account items in alphabetical order. Enter negative amounts using either a negative sign preceding the number 03.-45 or parentheses es (45)
Acco (c) Item (a) Basic Type of Account Asset Account Debited (b) Specific Account Inventory Amount Basic Type of Account Asset Specific 1 $3.990 2. 5 3. $ 4. $ 5. ? $ $ $ $ 7. $ $ 8. $ 9. 10.
unt Debited ) (c) Account Credited (b) Specific Account (c) Account (a) Basic Type of Account Asset Amount Amount tory $3,990 Cash -$3.990 V > $ v $ $
| Account debited | Account credited | |||||
| Basic type of account | Specific Account | Amount | Basic type of account | Specific Account | Amount | |
| 1 | Asset | Inventory | $3,550 | Asset | Cash | $3,550 |
| 2 | Liability | Accounts payable | $855 | Asset | Inventory | $855 |
| 3 | Asset | Inventory | $4,560 | Liability | Accounts payable | $4,560 |
| 4 | Expense | Freight in | $490 | Asset | Cash | $490 |
| 5 | Liability | Accounts payable | $3,990 | Revenue | Discount received | $79.80 |
| (3990 x 2%) | ||||||
| Asset | Cash | $3,910.20 | ||||
| (Balance) | ||||||
| 6 | Asset | Accounts receivable | $20,000 | Revenue | Sales | $20,000 |
| Expense | Cost of goods sold | $8,000 | Asset | Inventory | $8,000 | |
| 7 | Expense | Sales returns | $610 | Asset | Cash | $610 |
| Expense | Loss of inventory | $261 | Expense | Cost of goods sold | $261 | |
| 8 | Expense | Freight out | $650 | Asset | Cash | $650 |
| 9 | Expense | Sales returns | $490 | Asset | Accounts receivables | $490 |
| Asset | Inventory | $179 | Expense | Cost of goods sold | $179 | |
| 10 | Asset | Cash | $9,120 | Asset | Accounts Receivable | $9,120 |
