Accounting records for Red Deer Tire Ltd. yield the following data for the year ended December 31, 2020 (amounts in thousands): Inventory, December 31, 2019 ........................................................................... $ 550 Purchases of inventory (on account)................................................................... 1,200 Sales of inventory80% on account; 20% for cash (cost $900) ......................... 2,000 Inventory at FIFO cost, December 31, 2020....................................................... 850

Requirements

1. Journalize Red Deer Tire's inventory transactions for the year under (a) the perpetual system and (b) the periodic system. Show all amounts in thousands.

. 2. What differences do you notice in the journal entries between the perpetual system and the periodic system?

3. Report ending inventory, sales, cost of goods sold, and gross profit on the appropriate financial statement (amounts in thousands), assuming the perpetual inventory system is used.