CASE 1 (100 points) CPU Winner sells computer peripherals. At December 31, 2018, the company's inventory amounted to $100,000. During the year 2019, the company made only one purchase and two sales. These transactions were as follows: January 17. Purchased merchandises to CPU World. The price of the merchandises was 100.000, discount terms 2/10; n/30 February 15. Paid the accounts payable to CPU World. March 25. Sold merchandises to CPU USER'S ASSOCIATION for $197.000 who paid cash. The cost of these items was $.88.750 December 18. Sold equipment to the local administration for $227.000. The cost of said equipment was $105.000, with discount terms 3/10; n/50. Said invoice was still unpaid at December 31, 2019 BC0114 ACCOUNTING I test 2 assignment - Word (C6o akaun pokykia) A Area A Calibri *KY. 14 A XX A. A Aa . A266Boft, Aab6Berr, Aa56BI Aa56Bel Aab Aa66Bar A05630/2 A0668/4, 4056Bal A2563 106 1 be3 WHT... 3aronono... 3aronoso... Barononok Monsaron Cabe B... Benenne Cur ... Crporni D E opas 19 20 s . . 1. 6 7. 1.1.2.1.3.1. A 8. 9. 10. 11 12 13 14 15 16 17 21 18 22 25 23 26 24 a. Prepare journal entries to record these transactions, assuming that CPU Winner uses a perpetual inventory system. Provide with a developed explanation of the different entries and a justification of the amounts recorded. (10 points for the entries, 10 points for the explanations) b. Compute the ending balance in the Inventory account at the close of business on January 6 Explain your answer. (5 points for the entries, 5 points for the explanations) c. Prepare the company's income statement for the year 2019 taking into account that the remaining expenses of the company during the whole year amounted to 76.500 (10 points). Explain the different entries of the income statement and in particular the effects of the discount terms on the operations where applicable (20 points). d. Explain the main differences between the perpetual and periodic inventory system and record the transactions using a periodic inventory system (10 points for the entries, 10 points for the explanations) e. Prepare the company's trial balance at January 1, 2020 taking into account a Balance sheet at January 1 2009 as follow (20 points): CPU Winner Balance sheet Jauary 1, 2019 Cash Inventory Equipement Accumulated depreciation Equipement Land Building Accumulated depreciation Building Capital Retained earnings 227.000 100.000 26.000 -26.000 123.000 75.000 -75.000 250.000 200.000 Total 450.000 450.000