Here are some selected transactions for Valley Enterprises: Bought inventory on credit, R1 000. Bought
Question:
Here are some selected transactions for Valley Enterprises:
• Bought inventory on credit, R1 000.
• Bought inventory for cash, R600.
• Sold inventory on credit, R300 (cost R200).
• Sold inventory for cash, R400 (cost R267).
• Assume opening inventory to be R5 000 and closing inventory to be R6 000.
You are required to:
1 Record the transactions in the general journal for both the perpetual inventory system and periodic inventory system.
2 Calculate the:
a. Gross profit for each system.
b. Gross profit as a percentage of sales under each system.
c. What is the mark-up on cost for the perpetual inventory system?
Step by Step Answer:
Fundamental Accounting
ISBN: 9781485112112
7th Edition
Authors: David Flynn, Carolina Koornhof, Ronald Arendse, Anna C. E. Coetzee, Edwardo Muriro, Louise Christel Posthumus, Louise Mancy Smit