Answer :
Answer:
A.
Jan 4
Dr Accounts receivable $640
Cr Sales $640
Jan 11
Dr Purchases $975
Cr Accounts payable $975
Jan 13
Dr Accounts receivable $1,050
Cr Sales $1,050
Jan 20
Dr Purchases $1,120
Cr Accounts payable $1,120
Jan 27
Dr Accounts receivable $900
Cr Sales $900
Jan 31
Dr Inventory $2,095
Cr Purchases $ 2,095
Dr Cost of Good sold $1,925
Cr Inventory $1,925
B. $665
C.
Jan 4
Dr Accounts receivable $640
Cr Revenue $640
Dr Cost of goods sold $480
Cr Inventory $480
Jan 11
Dr Inventory $975
Cr Accounts payable $975
Jan 13
Dr Accounts receivable $1,050
Cr Revenue $1,050
Dr Cost of goods sold $770
Cr Inventory $770
Jan 20
Dr Inventory $1,120
Cr Accounts payable $1,120
Jan 27
Dr Accounts receivable $900
Cr Revenue $900
Dr Cost of goods sold $675
Cr Inventory $675
D. $665
Explanation:
PERIODIC SYSTEM
This type of inventory system does not have the proper monitoring of its inventory and relies solely on physical count to determine its inventory end at the end of the period. Proforma entry to record transaction are as follows;
To record purchases.
Debit purchase xx
Credit Accounts payable/cash xx
To record sales
Debit Accounts receivable/cash xx
Credit Sales xx
Period end journal entry
Debit Inventory xx
Credit Purchases xx
(to close purchases account to inventory)
Debit Cost of goods sold xx
Credit Inventory xx
(to close cost of goods sold of the actual sales against inventory account)
PERPETUAL INVENTORY SYSTEM
The company uses the stock card to maintain an updated inventory records.
To record purchases;
Debit Inventory xx
Credit Accounts payable / cash
To record sales
Debit Accounts receivable/cash xx
Credit Revenue xx
Debit Cost of goods sold xx
Credit inventory xx
*under perpetual inventory system, the company need not to record a period end entry because during purchases, all recording directly closed to inventory already and all cost of goods sold of the corresponding sales are recorded up to date during the transaction date.