QS-4-8

Chapter 4 Reporting and Analyzing Merchandising Operations 199 The following supplementary records summarize Tesla Company's merchandising activities for year 2018 Exercise 4-8 (it uses a perpetual inventory system). Set up T-accounts for Merchandise Inventory and Cost of Goods Inventory and cost of seles Sold. Then record the summarized activities in those T-accounts and compute account balances. transactions in T-accounts P1 P2 Cost of merchandise sold to customers in sales transactions.. Merchandise inventory, December 31,2017 Invoice cost of merchandise purchases, gross amount.. Shrinkage determined on December 31, 2018 Cost of transportation-in Cost of merchandise returned by customers and restored to inventory Purchases discounts received Purchases returns and allowances $196,000 25,000 192.500 800 2.900 2,100 1,700 4,000 Check Year-end Merch Inventory. Dec. 31, $20,000 Prepare journal entries for the following merchandising transactions of Dollar Store assuming it uses a Exercise 4-9 perpetual inventory system and the gross method. Recording purchases Nov. 1 Dollar Store purchases merchandise for $1,500 on terms of 2/5, n/30, FO B shipping point, in sales, returns, and shipping voice dated November 1. Dollar Store pays cash for the November I purchase. Dollar Store discovers and returns $200 of defective merchandise purchased on November 1. and paid for on November 5, for a cash refund Dollar Store pays $90 cash for transportation costs for the November 1 purchase. P1 P2 5 7 10 13 Dollar Store sells merchandise for $1,600 with tecme n,3 The cost of the merchandise is $800 16 Merchandise is returned to the Dollar Store from the Novaher 3 rsection The returned items are priced at $160 and cost $80; the itenss werc noda ngel sni were etorned to inventory The following list includes selected permanent acce December 31. 2018, unadjusted trial balance of Etoiko t PNAScorats from the Exercise 4-10 c atong with the ad- Prepering adjusting and