Part A: Journal entries Lab Assignment #5 Perpetual Method Purchase $100 inventory, terms 2/10,n/30 Dr. Inventory 100 Cr. Accounts Payable Purchase return of $ 100 Payment made (within discount period) for purchase of $100 less the return. Freight in of $ Sales on account of merchandise of $200, with terms 2/10, n/30, with a cost of $120. Sales return of $ Collection of payment made within discount period, less the return. a. When is Cost of Goods Sold recognized? b. How do you calculate Net Sales? Part B: 1. Johnson & Jones has a cost of goods sold of $505,000, beginning inventory of $150,000, purchases of $500,000, purchase returns of $25,000, purchase discounts of $5,000 and freight in of $20,000. What is the value of ending inventory? a. $150,000 b. $640,000 c. $135,000 d. 490,000