For each merchandising transaction below, for Alpha Betts Co. (ABC), determine what recording would be necessary...

  

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For each merchandising transaction below, for Alpha Betts Co. (ABC), determine what recording would be necessary first assuming (1) a periodic inventory system and then assuming (ii) a perpetual inventory system. (Assume the gross method for any purchase discounts or sales discounts.) (a) On March 6th, ABC purchased $380 of goods from Gamma Vending on account, with terms of 1/15, n60. (b) On March 7th, ABC sold merchandise for $200 to Customer A on account. (ABC offers the same terms to all customers for sales on account: 2/10, n30.) (Where necessary, assume the cost of these goods is $130.) (c) On March 9th, ABC purchased $1,000 of goods from lota Sourcing on account, with terms of 2/5, n45. (d) On March 10th, ABC returned goods costing $80 to Gamma Vending because they damaged beyond repair. (e) On March 11th, ABC purchased $700 of goods from Psi Supply on account, with terms n30. (f) On March 15th, ABC received payment from Customer A. (g) On March 17th, ABC paid the balance due to Gamma Vending. (h) On March 19th, ABC sold merchandise for $400 to Customer B on account. (Where necessary, assume the cost of these goods is $225.) (i) On March 20th, ABC paid the balances due to both lota Sourcing and Psi Supply. () On March 22nd, Customer B returned $60 of goods (with an assumed cost to ABC of $40) that were not to specification. (k) On March 31st, ABC received payment from Customer B. What I am asking for is that you identify how each merchandising transaction described would be recorded, under periodic and then under perpetual. So, your response for each of (i) and (ii) for each transaction would indicate what accounts would be affected (either increased or decreased) and by how much. Note that some transactions might affect more than two accounts. Sometimes the recording is exactly the same for periodic and perpetual, although in many cases periodic will use some different accounts. As a basic example, that is probably included in the outline, if a company acquires goods for resale on account in a perpetual inventory system, the recording would include an increase to inventory and an increase to accounts payable. (You would also need to indicate the amount.) If it were in a periodic system, then it would include an increase to purchases and an increase to accounts payable. For each merchandising transaction below, for Alpha Betts Co. (ABC), determine what recording would be necessary first assuming (1) a periodic inventory system and then assuming (ii) a perpetual inventory system. (Assume the gross method for any purchase discounts or sales discounts.) (a) On March 6th, ABC purchased $380 of goods from Gamma Vending on account, with terms of 1/15, n60. (b) On March 7th, ABC sold merchandise for $200 to Customer A on account. (ABC offers the same terms to all customers for sales on account: 2/10, n30.) (Where necessary, assume the cost of these goods is $130.) (c) On March 9th, ABC purchased $1,000 of goods from lota Sourcing on account, with terms of 2/5, n45. (d) On March 10th, ABC returned goods costing $80 to Gamma Vending because they damaged beyond repair. (e) On March 11th, ABC purchased $700 of goods from Psi Supply on account, with terms n30. (f) On March 15th, ABC received payment from Customer A. (g) On March 17th, ABC paid the balance due to Gamma Vending. (h) On March 19th, ABC sold merchandise for $400 to Customer B on account. (Where necessary, assume the cost of these goods is $225.) (i) On March 20th, ABC paid the balances due to both lota Sourcing and Psi Supply. () On March 22nd, Customer B returned $60 of goods (with an assumed cost to ABC of $40) that were not to specification. (k) On March 31st, ABC received payment from Customer B. What I am asking for is that you identify how each merchandising transaction described would be recorded, under periodic and then under perpetual. So, your response for each of (i) and (ii) for each transaction would indicate what accounts would be affected (either increased or decreased) and by how much. Note that some transactions might affect more than two accounts. Sometimes the recording is exactly the same for periodic and perpetual, although in many cases periodic will use some different accounts. As a basic example, that is probably included in the outline, if a company acquires goods for resale on account in a perpetual inventory system, the recording would include an increase to inventory and an increase to accounts payable. (You would also need to indicate the amount.) If it were in a periodic system, then it would include an increase to purchases and an increase to accounts payable.

Answer rating: 100% (QA)

a i In a periodic inventory system the recording for this transaction would include an increase to purchases and an increase to accounts payable ii In ... View the full answer