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Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as
Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated. Assume a perpetual inventory system is in use. 1 2. 3. 4. 5. 6. Buyer: Purchase of $3,920 of inventory for cash. Buyer: Return of $340 of inventory to seller for credit on account. Buyer: Purchase of $4,480 of inventory on account, terms 2/10, 1/45. Buyer: Payment of $480 cash for freight on purchase of inventory (FOB shipping point). Buyer: Payment of amount owed for purchase of $3.920 of inventory, terms 2/10,1/30, paid within discount period. Seller: Sale of inventory on account, terms n/30. Selling price $10,000; cost $4,000. Management expects a return rate of Seller: Return of damaged inventory from buyer for cash. Selling price $600 cost $256. All of the goods were discarded because they are not resaleable. Seller: Payment of $640 cash for freighton sale of inventory (FOB destination). Seller: Return of unwanted inventory from buyer for credit on account. Selling price $480; cost $176. Goods restored to inventory for future resale. Seller: Receipt of payment ($8.960) from customer on account, terms /30. 7.69%. 7. 8 9. 10. For each of the above transactions, indicate (a) the basic type (asset, liability, revenue, or expense) of each account to be debited and credited: (b) the specific name(s) of the account(s) to debit and credit (for example, Inventory); and (c) whether each account is increased (+) or decreased (-) and by what amount. The first one has been done for you as an example. (Enter specific debited account items in alphabetical order. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Account Debited (b) (c) (a) Basic Type of Item Basic Type of Specific Account Amount Account Account Asset Inventory $3,920 Asset 1. 2 Llability Accounts Payable 840 Asset Inventi 3. Asset Inventory $ 4,480 Accoul 4. Asset Inventory $ 480 $ $ 10. Asset Cash Asset > Accoul Question 3 of 5 1.41 / 3 1 2. 3. 5. Listed below are selected examples of transactions related to the purchase and sale of inventory from the perspective of the seller or the buyer as indicated. Assume a perpetual inventory system is in use. Buyer: Purchase of $3,920 of inventory for cash. Buyer: Return of $340 of inventory to seller for credit on account. Buyer: Purchase of $4.480 of inventory on account, terms 2/10,n/45. 4. Buyer: Payment of $480 cash for freight on purchase of inventory (FOB shipping point). Buyer: Payment of amount owed for purchase of $3,920 of inventory, terms 2/10,1/30, paid within discount period. Seller: Sale of inventory on account, terms n/30. Selling price $10,000:cost $4.000. Management expects a return rate of Seller: Return of damaged inventory from buyer for cash. Selling price $600 cost $256. All of the goods were discarded because they are not resaleable. Seller: Payment of $640 cash for freight on sale of inventory (FOB destination). Seller: Return of unwanted inventory from buyer for credit on account. Selling price $480; cost $176. Goods restored to inventory for future resale. Seller: Receipt of payment ($8,960) from customer on account, terms 1/30. 7.699. 7. 8. 9. 10. For each of the above transactions, indicate (a) the basic type (asset, liability, revenue, or expense) of each account to be debited and credited: (b) the specific name(s) of the account(s) to debit and credit (for example, Inventory); and (c) whether each accountis increased (+) or decreased (-) and by what amount. The first one has been done for you as an example. (Enter specific debited account items in alphabetical order. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) bited Account Credited (c) (a) (b) (c) Basic Type of Amount Specific Account Account Amount $3,920 Cash -$3,920 nt Asset $ 840 Asset Inventory S 4,480 Asset Inventory S Revenue $ Asset > S $ Asset S
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