Text: E 8-4

The following information is available for the Kleinschmidt Corporation for 2013:

Beginning inventory $112,000

Merchandise purchases (on account) 265,000

Freight charges on purchases (on account) 16,000

Merchandise returned to supplier (for credit) 6,000

Ending inventory 123,000

Sales (on account) 350,000

Cost of merchandise sold 264,000

Required:

Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.

Exercise 8-2

Goods in transit; consignment

LO8-2

Text: E 8-7

The December 31, 2013, year-end inventory balance of the Delphi Printing Company is $317,000. You have been asked to review the following transactions to determine if they have been correctly recorded.

1. Materials purchased from a supplier and shipped to Delphi f.o.b. destination on December 28, 2013, were received on January 2, 2014. The invoice cost of $50,000 is not included in the preliminary inventory balance.

2. At year-end, Delphi had $12,000 of merchandise on consignment from the Harvey Company. This merchandise is included in the preliminary inventory balance.

3. On December 29, merchandise costing $17,000 was shipped to a customer f.o.b. shipping point and arrived at the customer