Assume that Merryland’s Markets had an inventory balance of $32 570 at the close of the last accounting period. The following sales and purchase transactions are for the current period:

1. Purchased goods on account for $27 190.

2. Returned part of the above purchase that had an original purchase price of $1590.

3. Paid for the balance of the purchase in time to receive a discount of 2% of the purchase price.

4. Sold goods costing $24 900 for $49 820. Cash of $23 000 was received, with the balance due on account.

5. Goods sold on credit for $2020 (cost $1010) were returned.

Required

A. In two columns, prepare general journal entries (ignoring GST) assuming:

    1.  a periodic inventory system is used

    2.  a perpetual inventory system is used.

B. Same as for requirement A, except that GST is to be added to the figures where appropriate.

C. Suppose that a physical count of the inventory at the end of the current period shows inventory of $30000 to be on hand. Present the entries (if any) required under each inventory system to adjust for any discrepancy.

D. Comment on which system would best disclose any discrepancy.