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13 March, 00:35

Sage Hill, Inc. uses a perpetual inventory system. Its beginning inventory consists of 130 units that cost $210 each. During August, the company purchased 215 units at $210 each, returned 6 units for credit, and sold 245 units at $480 each.

Required:

1. Journalize the August transactions.

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  1. 13 March, 00:54
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    Sage Hill, Inc.

    Perpetual Inventory System

    1) Merchandise Inventory $45150 Dr.

    Accounts Payable / Cash $ 45150 Cr

    Purchased 215 units at $210 each $ 210*215 = $45150

    2) Accounts Payable $ 1260 Dr

    Merchandise Inventory $1260 Cr

    Returned 6 units for credit (6*210 = 1260)

    3) Accounts Receivable (Cash) $ 117600 Dr

    Sales $ 117600 Cr

    Sold 245 units at $480 each (245*$480 = 117600)

    Cost Of Goods Sold $51450Dr

    Merchandise Inventory $51450Cr

    (245 * 210 = $51450) The cost of goods sold is recorded at the time of sales under perpetual inventory system.

    4) Closing Entry

    Sales $ 117600 Dr

    Income Summary $ 117600 Cr.
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