Ask Question
18 November, 03:58

Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $77,000. Purchases of inventory on account during the year totaled $302,000. Inventory costing $327,000 was sold on account for $504,000. Required: Record transactions for the purchase and sale of inventory. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

+1
Answers (1)
  1. 18 November, 04:41
    0
    Refer explanation

    Explanation:

    1. Purchase of Inventory ($302000)

    This transaction has occurred on account which means that payment was not made immediately but would be made at a future date, thus a creditor to the business.

    Debit : Purchases account : $302000

    Credit : Accounts Payables account : $302000

    2. Sale of inventory ($504000)

    The sale of inventory requires two separate transactions. The sale is accounted and along with this, the amount of inventory sold would also have to be accounted as an asset reduction.

    A. To reduce inventory:

    Debit : Cost of Sales account : $327000

    Credit : Inventory account : $327000

    B. Record the sale:

    Debit : Accounts Receivables account : $504000

    Credit : Sales account : $504000

    This too is a sale on account which means that a debtor has been incurred who will pay for the sale at a later date.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $77,000. Purchases of inventory on ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers