For each of the following transactions and economic events, prepare the necessary journal entries. Provide a brief explanation for each journal entry and state any assumptions you make. Assume a periodic inventory system is used.
a. Merchandise costing $5,000 is returned by a customer. The inventory can be resold
at full price. The customer paid $8,000 for the merchandise.
b. An inventory count reveals the accounting records have $20,000 more inventory more than is physically present.
c. $15,000 of inventory is purchased for cash.
d. Inventory costing $10,000 is sold to a customer for $22,000 cash. The entity uses a periodic inventory control system.
e. Inventory costing $8,000 is sold to a customer on credit for $20,000, with the amount due in 30 days. The entity uses a perpetual inventory control system.
f. Beginning inventory is $25,000, purchases during the year are $200,000, and the year-end inventory count shows $32,000. The company uses a periodic inventory system.
g. Management discovers that the NRV of its inventory is $200,000 and its cost is $215,000.