Question 3 (20 marks)

A: ABC Company uses the perpetual inventory system and had the following transactions during August 2018:

DateTransactionAmount

June. 5Purchased inventory on account$ 240,000

June. 9Paid for transportation of goods purchased25,000

June. 10Returned defective merchandise to the seller35,000

June. 15Paid for goods purchased on August 5?

Credit terms of invoice are 2/15, n/45.

Required: Prepare the general journal entries to record these transactions. Explanations are not required. [9 marks].

B: Xcite Company uses Perpetual Inventory System. The following information is available for the month of March:

Mar. 1 Beginning inventory 200 units @$15

Mar. 5 Purchased 80 units @$18

Mar. 10 Sold 120 units @$30

Mar.15 Purchased 140 units @$20

Mar.25 Sold 100 units @$30

Required:

Prepare perpetual inventory record for Xcite Company using LIFO inventory costing method. (11Marks)