Sonrab Rava PoA- Ass ign ment tr 3 a 21564 Question ta ( Repeteal eget BY 2 PronceR COMPANY eee GENERAL JouRNAL | Dave 7 DeseReP TION tn) dearr | CREDIT - Toly.5| Account Receivable ooo | Sales Revenve | 4000 (% record wale of crutches on credit) 1] | Cost of Goode Sold : Yoo | Inventory | %e "record catof crutther Sold) | | | 2 Soles Returar & Allo weancer | | 1%0 | Acoumn® Receivable | 120 (To record vetwn of goods sold) | [ -12_ Taventor y [ec] iH | Coct of Goods sold | #2 0 (fo record coct of goods returned ) (ea . 9) Cash | FFF | | Soles Discount ut f I Accomte Receivable _ $20 | i (Rayment veceved Free customer along with discount 57.)=. gohiee Raza 2 1564 Question Lb (Perodic System ) Date 20 PLONeR — ComPany GENERAL Tourn DECet 0 \ecounts Receivable DECINAE | Sales Revenue e vevutches on credit) (Sale | Sales | Sales Returns R Allowances _ Accounts Receivable. (Retven of cribehes gold on Toly 9) 1g Cash Sales Dircount 6 Fivetes: Ae Accounts Receivable | (Payment of the crutches sold ps eye eS with diecwnt) [iBdhrab Raza 11567 vestion 2a ate__20__ ] al Te basic difference between the perpetual and the periodic | inventory system is that te “Trentory’ account is updated in the “perpetual _tystem evi time trantaclon occurs: whether the inventory i's bought or sold, Whereas, the inventory nok updated each and every time in the periodic inventory system, We record “inventory _boug ht 7 and cold as “Inventory” in te perpetual Syctem” 7 and We use the account titks “Purchaser? and | “Sales Bevenve” when menhandite bought anol told _ | pespectively i, the periodic inventory syctem, Moreover, the Cost of Goods Sold is computed _atter every | Singe transaction in the perpetva) syctem, The periodic (system, however, requires the comp utabon of Cost of Yoods Sold account at the end of tte Period, | The cesults in the end appear den tical] - however the [perpetual “system i rebtively afer from Fravd Beft ete. as compared to the Periodic system, The Yeason if > Simply because the inventory balance ic | actively computed in the former and Xe oppor te | case “in the latter, [ Tn the perpetual auctor we record Freight-in cock as a debit trancaclon to Tnventory account, [TE *he ellen paye the Freight Hen we debit Freight -ouk, Tn Hu case of Porchase Retuens and Rrchase Diccount, we —cvedt them to Thventory in the Per petva) system,Sohrab Ra2a Q156F Ques tion 2b Date__20__ Perpe tual inven tory Systems o By Using Fhe perpetual suyctem I can Compaire both my. A inventory amount that Shae been recorded and He ia inven amouit b hysttal count. Through this Z Can be awan of cots ing or stolen vaitestord T can stay informed _if Tam ruantg chert on 4 certain product becouse Twill have the irventory Count with me. This active surveillance might alo Kelp me to make _ a certain decisions or padictions’ i The work load in thie Syste would be high for my store +| As my size of business “ie small ;t would” be too | i | expentive for me 0 choose perpebal system, rs | Periadic inventory system: 1 a pit) The fist ard Bremart beneht of tha sydem is that st [ ts_ really simple as compared © He’ pevpetial system, 3 This system wrt lf be relatively cheaper, + Tis System evil] finitely vequire less Work as the [inventory Count Gnd the eaear goodr sold Gn computed | at Me end of te period, : f.4 Tt mig ht be Unaware of invento fone Gy thal t ay 4 F theres no active Surveillance ee Be inventorySohrabh Raza 21567 (buxstion 2¢ Date 20 . c| Example :- ae p oly 4: Purchased 10 graphic cards at £100 each » foro X42 Company, n dely 5: Sold 5 grap fe cards at$!20 each (cost $100 each) to abc Com pany. eat ss Date DescRTPTZ on add Debit | Credit PERPETLAL a fo Se : Tnvnlory len _ Account: Payable 1,000 * Accounts Receivable a = 5 [castor Good Gold [| S00 ee Inventory rt | 500% PERTOOTC 3 eae | 2020 i “ Toly.1| Purchases Yee |_| 7 200 : | Accounts Payable {Fah \heoa:- os) Pecounte Receivable G00 | 7 | Gales Revenve G00 f | E We can see that when inventory is Purchased we debit ‘Tnwntory’ in per petua) and ‘Porchace’? in periodic, ‘The second ent is the same but the cask of goods sold entry Ic vt Fade inane periodic oe. ee rg |Sohvab Raza NST Guestion Dd ate__20_ c Since we know that there fen’t active Surveillance inventory in the Periodic inven tory system appear to be a fe As the inventor Ca there might : w discrepancies “in the data obtained, : \ Count changes, so does the Financia] state ments, Therfore, the fnancia] — statements might appear t0 be diffeant jn each ot the inventory Systeme, Guetton De Even though my business fs small, ZL would cn choose the perpetual inventory system, I oll be actively c aware of my inventory count co that T can make Proper ‘dealstons | and Gin be aware of inventory UeFt, loss ete, Thus, even thowh it ts cosy as compared to the other cyctem, and Considering he benefits, ZL would choore the perpe tua] a inventory system. ¢Sohrab Raq Q21Sb6h Question 34 Pate____ 20 _ y +f Periodic ti oa of Cost of Goods availabe for cqle os | Date Explana tion Unite | Un'teast] Gtal Cart 23° Beginning Ten tory lo [fo ]s J, 200 | Purch ag 4o | 125 | so00 as | Purchase 50 130 | 6500 bon Porchase Yo | 132 5280 | ty ‘otal vats available for sale (40 | £ 12-980 pe enng enbory | 50 | Unite sold 90 ae 7 Computation of Erling Trventory »- Total Cost i 40 S132 $5280 5 lo 130 1,300 nog pu sOOL TE : Total eG 50 Het $ 6580 5 Computation of Cot of Goods Sid : a Cost of Goods awilable tor cale $790 ~ | Less: Ending Znventory = 6,500 > i | Cost of Caads Sold ee $4400Sohrab Razs anstt Question 3b Date__20__ "Fy fo PERPETUAL Bae ore Talres (PEN) = + |e (108 $120) $1,200, | 0 @ Fas $5200] ofr] CSE (RA NC LP 1 : (o@g120) § 1, 200 re to $126) $1,280 | (30@S1a5)$ 3750. I [oO S130) $6500 | (30@ $125) ' | (OOS 10 Jt 10 250 1 (o@Sias) $2500 | o@éi2s)] f (506$130$3,750 [_ Co@brs) $1250 | i (200 $130) $2,600 | (30@$ 180)$3,900 ia (Hogan) &5 380 | (200 Sido) | | 1 (oA $i32J/$ 4 160 | (200 $130) $2,600 | (10@ $130) | | 7 | Gosia) $650! 7 $1,400 flnugar $680:Gohvob Roza : 2664 vestion 3c Date 20 i i Eee Lif Periodic a ie Computation of Cort F of Goods available for sake A 2 _ | Dete Explanation Unite | Uniteast [1 | Total cost io |gt2o [$200 | Beginning UTnventoy | Purchase a —-e | 125 H $000 Purchase alsa al eset | Purchase 122. | a Units Unik: cost “Total cost ~ __10 $f Re § 1,200 pi 1 1 46. 125 L__ 5,000 : | Total | 50 Patra 6 200 ne fae “Computation of Cost of Goods Sold:- i ; | Cost ‘ Goals available for sale fet —S1t90 hess: Ending Inventor 6200 ‘aes ie Cost oF Godls Sold < EI FeoSona Rare fy oan ay 21567 Question ad ate __20__ LL _LTFo PeapeTuar eee _[ dare PLROVASES Cost of adods Sard | Balance (Pat) (10@ $120) $1,200 * (Yo@ 4125) £5000 (10@ 4120) . (20@$125) $2500 (40004125)) $6 200 © (10@ $120) (10@ $25) J ¢ 3 t00 = ——-- (S0@ $130) $6,500 | (10@$ 130) $ 2, 600 Cal 20 ) ie (208 $125) [£19200 = (50@ $ 9) = 0@$120) z (2084120) f $3,600 © (30@f 130) z | (30@$130) $3,900 | (o@4120) 5 (20@ $129 J $3 708 =: (4o@$ 132) $5280 Total | (20 $132) ¢ 2640 $tie4o 0@$)20) stn 980; (40 $132) é Wo @$ 120) (20 @t125) ¢ $6 240 1208 4132) $6340