NAME: Lorraine Joy M.

Abanilla BSA-1 SECTION CODE: 075

PROFESSOR: Mr. Remi Gabon SUBJECT: INTACC-1

Activity 2 (A02) - Inventory Accounting Systems 3.0

Problem 1
SKEWED Company had the following transactions related to inventories during the current year
2020:

Requirements: (20 points)

Prepare the required journal entries to record the transactions using the:

1. Periodic inventory system.

2. Perpetual inventory system.
 Periodic inventory system.

DATE TRANSACTION DEBIT CREDIT

January 1 Purchases ₱3,000,000
Cash ₱1,500,000
Accounts Payable ₱1,500,000
To record the purchase of inventories from the supplier

Freight-in ₱40,000
Cash ₱40,000
To record the payment of freight cost incurred

February 1 Accounts Payable ₱800,000

Purchase returns ₱800,000
To record the return of the inventories purchased

May 1 Cash ₱800,000

Sales ₱800,000
To record the sale of inventories to customers for cash

May 31 Sales returns ₱240,000

Cash ₱240,000
To record the return of inventories sold for cash

August 1 Accounts Receivable ₱550,000

Sales ₱550,000
To record the sale of inventories on credit basis

September 1 Sales returns ₱180,000

Accounts receivable ₱180,000
To record the return of inventories sold on credit basis

December 31 Inventories ₱1,550,000

Income and expense summary ₱1,550,000
To record the adjustments for ending inventories
 Perpetual inventory system.

DATE TRANSACTION DEBIT CREDIT

January 1 Merchandise inventories ₱3,000,000
Cash ₱1,500,000
Accounts Payable ₱1,500,000
To record the purchase of inventories from the supplier

Merchandise inventories ₱40,000

Cash ₱40,000
To record the payment of freight cost incurred

February 1 Accounts Payable ₱800,000

Merchandise inventories ₱800,000
To record the return of the inventories purchased

May 1 Cash ₱800,000

Sales ₱800,000
To record the sale of inventories to customers for cash

Cost of goods sold ₱600,000

Merchandise inventories ₱600,000
To record the cost of inventories sold for cash

May 31 Sales returns ₱240,000

Cash ₱240,000
To record the return of inventories sold for cash

Merchandise inventories ₱160,000

Cost of goods sold ₱160,000
To record the reduction of the amount of cost of sales

August 1 Accounts Receivable ₱550,000

Sales ₱550,000
To record the sale of inventories on credit basis

Cost of goods sold ₱400,000

Merchandise inventories ₱400,000
To record the cost of inventories sold on credit basis

September 1 Sales returns ₱180,000

Accounts receivable ₱180,000
To record the return of inventories sold on credit basis

Merchandise inventories ₱150,000

Cost of goods sold ₱150,000
To record the reduction of the amount of cost of sales

December 31 No journal entry