PROBLEM: 5.

DATE ACCOUNT DEBITED CREDITED

May- Inventory(quantity=5) 2800
10 Account payable 2800
May- 1) Account receivable 3600
23 Sale revenue 3600
2) Cost of goods sold 2240
inventory 2240
May - Inventory(quantity=7) 3920
24 Account payable 3920
June Account payable 2,800
-9 Cash 2,800
June 1)Cash 1900
-19 Sales revenue 1900
3) Cost of goods sold 1120
Inventory 1120
June Cash 3600
-22 Account receivable 3600
A) Journal using perpetual inventory system

B) Posting entries to an inventory subsidiary ledger:

Subsidiary ledger for inventory (P-500 facsimile machine)

PURCHASED SOLD BALANCE
DATE UNITS Unit total units Unit Total Units Unit Total
cost cost cost
May 5 560 2,800 5 560 2,800
-10
May 4 560 2240 1 560 560
-23
May 7 560 3920 8 560 4480
-24
June 2 560 1120 6 560 3360
-19

C) There were 8 p-500 facsimile machines in inventory on May 31. we

get this information after posting useful information from journal to
subsidiary ledger of inventory. Information like balance of inventory
account, number of units, per unit cost, different products in inventory
etc can easily be taken from subsidiary ledger.

D)The inventory subsidiary ledger contain many useful information. It

tracks down the whole record of units being purchased, sold and
purchase return or sales return. It also tells the information about per
unit cost, total balance i.e; number of units multiplied by per unit cost,
and also the date of purchase or sale. Subsidiary ledger provides
conveyance for concerned people as they get all information under one
banner and it helps them in conducting daily business.