Widgetland is trying to decide between using a periodic and perpetual inventory system to account for the widgets that it sells. The following information is available. Assume the cost of each widget is consistent at $5.00 each, and the selling price is $11.50 (all cash sales): Widgets on hand, in inventory, at beginning of year: Purchases for the year, on account: Sold to customers during the year: Widgets on hand, in inventory, at end of year: 5,000 100,000 99,000 5,500 1. Prepare the journal entries needed to record the transactions for widgets throughout the year assuming Widgetland uses a periodic inventory method. Prepare the income statement to gross profit (i.e. Sales minus COGS) assuming Widgetland uses a periodic inventory method.

Widgetland is trying to decide between using a periodic and perpetual inventory system to account for the widgets that it sells. The following information is available. Assume the cost of each widget is consistent at $5.00 each, and the selling price is $11.50 (all cash sales): Widgets on hand, in inventory, at beginning of year: Purchases for the year, on account: Sold to customers during the year: Widgets on hand, in inventory, at end of year: 5,000 100,000 99,000 5,500 2. Prepare the journal entries needed to record the transactions throughout the year assuming Widgetland uses a perpetual inventory method. Prepare the income statement to gross profit (i.e. Sales minus COGS) assuming Widgetland uses a perpetual inventory method.