Table 7-2

Pan Company had the following transactions occur during May 20X9.

May 2 Inventory was purchased on account for $5,000, terms 2/10, n/30.

May 3 Inventory costing $1,000 was returned.

May 9 Pan Company paid for the inventory.

May 15 Inventory costing $2,200 was sold on account for $3,800, terms 3/10, n/45.

May 31 Closing entries are prepared for the month-end financial statements.

6) Referring to Table 7-2, if Pan Company were using the perpetual inventory system, what is the journal entry for May 2?

A) Inventory 5,000

Accounts Payable 5,000

B) Purchases 4,900

Accounts Payable 4,900

C) Purchases 5,000

Accounts Payable 5,000

D) Inventory 4,900

Cash Discounts on Purchases 100

Accounts Payable 5,000

E) Purchases 4,900

Cash Discounts on Purchases 100

Accounts Payable 5,000

7) Referring to Table 7-2, if Pan Company were using the periodic inventory system, what is the journal entry for May 2?

A) Inventory 4,900

Accounts Payable 4,900

B) Inventory 5,000

Accounts Payable 5,000

C) Purchases 5,000

Accounts Payable 5,000

D) Inventory 4,900

Cash Discounts on Purchases 100

Accounts Payable 5,000

E) Purchases 4,900

Cash Discounts on Purchases 100

Accounts Payable 5,000

8) Referring to Table 7-2, if Pan Company were using the perpetual inventory system, what is the journal entry for May 3?

A) Accounts Payable 1,000

Inventory 1,000

B) Accounts Payable 1,000

Purchases 1,000

C) Accounts Payable 1,000

Purchase Returns and

Allowances 1,000

D) Accounts Payable 1,000

Cash Discounts on Purchases 20

Inventory 980

E) Accounts Payable 1,000

Cash Discounts on Purchases 20

Purchases 980

9) Referring to Table 7-2, if Pan Company were using the periodic inventory system, what is the journal entry on May 3?

A) Accounts Payable 1,000

Inventory 1,000

B) Accounts Payable 1,000

Purchases 1,000

C) Accounts Payable 1,000

Purchase Returns and Allowances 1,000

D) Accounts Payable 1,000

Cash Discounts on Purchases 20

Inventory 980

E) Accounts Payable 1,000

Cash Discounts on Purchases 20

Purchases 980

10) Referring to Table 7-2, if Pan Company were using the perpetual inventory system, what is the journal entry for May 9?

A) Accounts Payable 4,000

Inventory 100

Cash 3,900

B) Accounts Payable 4,000

Inventory 80

Cash 3,920

C) Accounts Payable 5,000

Inventory 100

Cash 4,900

D) Accounts Payable 4,000

Cash Discounts on Purchases 100

Cash 3,900

E) Accounts Payable 4,000

Cash Discounts on Purchases 80

Cash 3,920