1 General journal

2 Perpetual inventory record

QUESTION 1.

Prepare journal entries to record the following merchandising transactions of Julia Agostini Co., which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable by name; for example, record the purchase on August I in Accounts Payable Danielle Cardillo Co.

Aug. 1 Purchased merchandise from Danielle Cardillo Company for $2,500 under credit term of 1/10, n/45, FOB destination, invoice dated August 1.

2 At Danielle Cardillos request, Julia paid $300 for freight charges on the

August 1 Purchase reducing the amount owed to Danielle Cardillo Company.

4 Sold merchandise to Iris Castellanos Co. for $3,800 under credit terms of 2/10, n/60, FOB destination. The merchandise had cost $1,700.

Purchased merchandise from Yen Chu Corporation for $6,000 under credit terms of 2/15, n/30. FOB shipping point, invoice dated August 6. The invoice showed that at Julia's request Yen Chu paid the $160 shipping charges and added that amount to the bill.

Paid $140 for shipping charges relating to the August 4 sale to Iris Castellanos Co.

Iris Castellanos returned merchandise from the August 4 sale that had cost Julia

$500 and been sold for $750. The merchandise was restored to inventory.

After negotiations with Yen Chu Corporation concerning problems with the merchandise purchased on August 6, Julia received a credit memorandum from Yen Chu granting a price reduction of $600.

14 Received the balance due from Iris Castellanos for the August 4 sale less the return on August 8.

15. Paid the amount due Yen Chu Co. for the August 6 purchase less the Price reduction granted.

19 Sold merchandise to Kevin Cruz Corp. for $3,100 under credit terms of 2/10, n/30, FOB destination, invoice dated August 19. The merchandise had cost $1,000.

22 Kevin Cruz requested a price reduction on the August 19 sale because the merchandise did not meet specifications. Julia sent Kevin Cruz a $600 credit memorandum to resolve the issue.

Received Kevin Cruz Co. cash payment for the amount due from the August 19 sale.

Paid Danielle Cardillo Company for the amount due from the August 1 purchase.

QUESTI0N2

2. Abigaelle Dorsainvils House of Fashions uses a perpetual inventory system. It entered into the following calendar-year 2021 purchases and sales transactions:

Jan. 1 Beginning inventory April 1 Purchase

April 5 Sales

July 7 Purchase Aug12 Purchase

600 units @ $40/unit 750 units @ $48/unit

300 units @ $42/unit 400 units @ $50/unit

500 units @ $80/unit

Sept. 2 Sales 650 units @ $80/unit

Totals

2050 units

1150 units

Required:

Compute cost of goods available for sale and the number

of units available for sale.

Compute the number of units remaining in ending inventory.

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) Weighted Average (round per unit cost to a cent and inventory balances to the dollar) and (d) Specific Identification. For Specific Identification, the following units were sold - 500 units from beginning inventory, 500 units from the April 1 purchase, and 150 units from the August 12 purchase.

Compute the gross profit earned by the company for each of the costing methods in part 3.