I would like to know why Merchandise inventory is being credited for $3,000 in the following problem, as well as what 19X1 means.

Company A has the following information relating to its merchandise for 19X1:

Beginning Inventory: $120,000

Purchases (on account): $90,000

Ending Inventory: $147,000

Purchases Discounts: $3,000

Sales on Account:

At cost: $60,000

At selling price: $95,000

Determined by physical count.

Prepare the necessary journal entries under the periodic system.

Solution:

Merchandise Inventory 90k (debit)

Accounts Payable 90k (credit)

Accounts payable: 3,000 (debit)

Merchandise inventory: 3,000 (credit)???????

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