Shown below are selected transactions of Konshock s a retail store
Shown below are selected transactions of Konshock’s, a retail store that uses a perpetual inventory system.
a. Purchased merchandise on account.
b. Recognized the revenue from a sale of merchandise on account. (Ignore the related cost of goods sold.)
c. Recognized the cost of goods sold relating to the sale in transaction b.
d. Collected in cash the account receivable from the customer in transaction b.
e. Following the taking of a physical inventory at year-end, made an adjusting entry to record a normal amount of inventory shrinkage.
Indicate the effects of each of these transactions on the elements of the company’s financial statements shown below. Organize your answer in tabular form, using the column headings shown below. (Notice that the cost of goods sold is shown separately from all other expenses.) Use the code letters I for increase, D for decrease, and NE for noeffect.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help