Assume that Widgets, Inc. uses a perpetual specific identification inventory system. During the period, it sold 3 units on credit to one customer. The sale included one item from the beginning inventory and 2 items from the May 5 purchase. Demonstrate the journal entry required to record the sale and the cost of the sale by selecting all of the correct items below. (Check all that apply.)

Jan 1 Beginning Inventory 10 @ $12

May 5 Purchase 10 @ $15

Aug 8 Sale 3 units x $60 each

a. Cost of Goods Sold is debited for $42

b. Purchases is credited for $42

c. Sales is debited for $180

d. Merchandise Inventory is credited for $42

e. Accounts Receivable is debited for $180

f. Merchandise Inventory is credited for $180

g. Sales is credited for $180

h. Accounts Receivable is credited for $180

i. Cost of Goods Sold is debited for $180

Question

Casey Roach

Business

3 April, 04:04

Assume that Widgets, Inc. uses a perpetual specific identification inventory system. During the period, it sold 3 units on credit to one customer. The sale included one item from the beginning inventory and 2 items from the May 5 purchase. Demonstrate the journal entry required to record the sale and the cost of the sale by selecting all of the correct items below. (Check all that apply.)

Jan 1 Beginning Inventory 10 @ $12

May 5 Purchase 10 @ $15

Aug 8 Sale 3 units x $60 each

a. Cost of Goods Sold is debited for $42

b. Purchases is credited for $42

c. Sales is debited for $180

d. Merchandise Inventory is credited for $42

e. Accounts Receivable is debited for $180

f. Merchandise Inventory is credited for $180

g. Sales is credited for $180

h. Accounts Receivable is credited for $180

i. Cost of Goods Sold is debited for $180

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Answers (1)

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Music Man · Answer 1

a. Cost of Goods Sold is debited for $42

d. Merchandise Inventory is credited for $42

e. Accounts Receivable is debited for $180

g. Sales is credited for $180

Explanation:

Under the Perpetual method two entries will be made.

Sr. No Accounts Dr. Cr.

1. Accounts Receivable $ 180

Sales $ 180

2. Cost Of Goods Sold $ 42

Merchandise Inventory $ 42

The perpetual inventory system continually updates accounting records for merchandising transactions - specifically for those records of inventory available for sale and inventory sold.