Assume that Merrylands Markets had an inventory balance of ($32) 570 at the close of the last


Assume that Merryland’s Markets had an inventory balance of \($32\) 570 at the close of the last accounting period. The following sales and purchase transactions are for the current period.

  1. Purchased goods on account for \($27\) 190.
  2. Returned part of the above purchase that had an original purchase price of \($1590.
  3. Paid\) for the balance of the purchase in time to receive a discount of 2% of the purchase price.
  4. Sold goods costing \($24\) 900 for \($49\) 820. Cash of \($23\) 000 was received, with the balance due on account.
  5. Goods sold on credit for \($2026\) (cost \($1010)\) were returned.


  1. In two columns, prepare general journal entries (ignoring GST) assuming:
  2. a periodic inventory system is used
  3. a perpetual inventory system is used.
  4. Suppose that a physical count of the inventory at the end of the current period shows inventory of \($30\) 000 to be on hand. Present the entries (if any) required under each inventory system to adjust for any discrepancy.

Comment on which system would best disclose any discrepancy.

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ISBN: 9780730382737

11th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie

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