Perpetual System

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Sales‫سجيل عمليات البيع‬ Purchases‫سجيل عمليات الشراء‬
Sales Purchases
Accounts receivable xx Merchandise Inventory xx
Sales revenue xx Accounts Payable xx
--------------------- ☺☺ ---------------------
Cost of Goods sold xx Purchase Return
Merchandise Inventory xx Accounts Payable XX
--------------------- ☺☺ --------------------- Merchandise Inventory XX
Sales Return --------------------- ☺☺ ---------------------
Sales return and allowance xx Payment within Credit period
Accounts receivable xx Accounts payable xx
Merchandise inventory xx
Merchandise inventory xx Cash xx
cost of Goods sold xx --------------------- ☺☺ ---------------------
--------------------- ☺☺ --------------------- Payment out Credit period
Collection Within credit period Accounts payable xx
Cash xx Cash xx
Sales discount xx --------------------- ☺☺ ---------------------
Accounts receivable xx Payment of Freight charge
--------------------- ☺☺ --------------------- Merchandise Inventory xx
Collection out credit period Cash xx
Cash xx
Accounts receivable xx
--------------------- ☺☺ ---------------------
Payment of Freight charge
Delivery Expense xx
Cash xx
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Solution

(a) June 1 Inventory ...................................................... 1,600

Accounts Payable ................................ 1,600

3 Accounts Receivable .................................. 2,500

Sales Revenue ..................................... 2,500

Cost of Goods Sold ..................................... 1,440

Inventory .............................................. 1,440

6 Accounts Payable ....................................... 100

Inventory .............................................. 100

9 Accounts Payable ($1,600 – $100) ............. 1,500

Inventory
($1,500 X .02) .................................... 30
Cash...................................................... 1,470

15 Cash ............................................................. 2,500

Accounts Receivable ........................... 2,500

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17 Accounts Receivable ..................................................... 1,800
Sales Revenue ..................................... 1,800

Cost of Goods Sold ..................................... 1,080

Inventory .............................................. 1,080

20 Inventory ...................................................... 1,800

Accounts Payable ................................ 1,800

24 Cash ............................................................. 1,764

Sales Discounts ($1,800 X .02) ................... 36
Accounts Receivable ........................... 1,800

26 Accounts Payable ....................................... 1,800

Inventory
($1,800 X .02) .................................... 36
Cash...................................................... 1,764

June 28 Accounts Receivable .................................. 1,600

Sales Revenue ..................................... 1,600

Cost of Goods Sold ..................................... 970

Inventory .............................................. 970

30 Sales Returns and Allowances................... 120

Accounts Receivable ........................... 120

Inventory ...................................................... 72
Cost of Goods Sold ............................. 72

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Under a Periodic System

Problem:
Waller Brothers Supply uses a periodic inventory system. During May, the following transactions and
events occurred.
May 13 Purchased 6 motors at a cost of $44 each from Ord Company, terms 1/10, n/30. The motors cost
Ord Company $25 each.
May 16 Returned 1 defective motor to Ord.
May 23 Paid Ord Company in full.
Instructions
Journalize the May transactions for Waller Brothers. You may omit explanations.

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Sales Discount
Offered to customers to promote prompt payment of the balance due.
Contra-revenue account (debit) to Sales Revenue.

Adjusting Entries
Generally the same as a service company.
One additional adjustment to make the records agree with the actual
inventory on hand.
Involves adjusting Inventory and Cost of Goods Sold.
--------------------------------------  --------------------------------------
Illustration: Suppose that PW Audio Supply has an unadjusted balance of $40,500 in
Merchandise Inventory. Through a physical count, PW Audio determines that its actual
merchandise inventory at year-end is $40,000. The company would make an adjusting
entry as follows.

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