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How do I do this ? Plug-In sells IT Hardware and Infrastructure. At December 31, 2018, the company's inventory amounted to $400,000. During the year
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Plug-In sells IT Hardware and Infrastructure. At December 31, 2018, the company's inventory amounted to $400,000. During the year 2019, the company made only one purchase and two sales. These transactions were as follows: January 17. Purchased merchandises from Silicon Makers. The price of the merchandises was 600.000, discount terms 2/10; n/30 January 27. Paid the accounts payable to Silicon Makers. March 25. Sold merchandises to Federal Pack for $997.000 who paid cash. The cost of these items was $.877.360 December 18.Sold hard ware to the local administration for $187.000. The cost of said equipment was $158.950, with discount terms 3/10; n/50. Said invoice was still unpaid at December 31, 2019 Instructions a. Prepare journal entries to record these transactions, assuming that Plug-In 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 98.000 including depreciation (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)Step by Step Solution
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