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Concept #1: Perpetual Inventory: Purchasing Summary

Additional Problems
Compass Mineral Group’s Inventory account decreased $37,500 and its Accounts Payable account (which relates solely to the purchase of merchandise) decreased $13,760 during the year. Compass also reported sales of $856,000 and cost of goods sold (COGS) of $597,600 during the same period. Compass’s payments to suppliers for inventory during the year were: a. $621,340 b. $573,860 c. $805,740 d. $648,860
When using a perpetual inventory system, a. no Purchases account is used. b. a Cost of Goods Sold account is used. c. two entries are required to record a sale. d. all of these.
S Company uses a perpetual inventory system and purchased $17,800 of merchandise on April 7 with credit terms of 1/10, n/30. Merchandise with a cost of $1,800 was damaged and returned to the seller on April 10. On April 16 the company paid the amount due. Prepare the journal entries to record the transactions on all three dates. Required: Prepare the necessary journal entries to record these transactions.
K Company purchased $5,800 of merchandise on credit, with terms 1/10, n/30, FOB shipping point. The shipping cost of $150 was paid upon receipt of the goods. $100 of merchandise was returned prior to paying for the goods. Required: If K Company uses a perpetual inventory system: a. What is the journal entry recorded for the purchase? b. What is the journal entry recorded for the shipping cost? c. What is the journal entry recorded for the return?
K Company sold inventory costing $1,400 on credit for the price of $2,000, with terms 2/10, n/30, FOB destination. The shipping cost of $100 was paid upon shipment of the goods. The buyer returned $250 of merchandise (retail price) prior to paying for the goods. Required: If K Company uses a perpetual inventory system: a. What is the journal entry recorded for the sale? b. What is the journal entry recorded for the shipping cost? c. What is the journal entry recorded for the return?
J Company uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 2/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 26, it paid the full amount due. The net amount debited to the purchases account is: a. $8,085 b. $8,250 c. $9,750 d. $0
J Company uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 2/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 26, it paid the full amount due. The cash paid on August 26 was: a. $8,085 b. $8,250 c. $9,750 d. $8,415
On September 12, J Company purchased merchandise in the amount of $5,800 from V Company on credit with terms of 2/10, n/30. J Company receives a $800 allowance on September 15 and pays the balance of the invoice on September 28. If J company uses the perpetual inventory method, the cost of goods sold recorded when the remaining inventory was sold would be: a. $5,800 b. $0 c. $5,000 d. $6,400