Four Inventory Costing Methods for Microprints Inc Microprints Inc. had the following transactions for the month of August 20X1
Aug. 2 Sold merchandise on account for $25,000; terms 2/10, n/30, FOB shipping point. The cost of goods sold is $18,000.
18 Received payments for the sale of August 2.
20 A total of $1,000 of the merchandise sold on August 2 was returned, and a full refund was made because it was the wrong merchandise. The cost of goods sold is $720.
28 An allowance of $1,300 was granted on the sale from August 2 because some merchandise was damaged; $1,300 cash was returned to the customer.
- Ashley Company engaged in the following transactions in August 20×1:
Aug. 4 Purchased merchandise on account at a cost of $ 14,000; terms 2/10, n/30, FOB shipping Point.
6 Paid freight of $200 on the purchase of August 4.
10 Sold goods for $10,000; terms 2/10, n/30. The cost of goods sold is $9,000.
12 Returned to the vendor, $2,400 worth of the merchandise purchased on August 4.
14 Paid the amount due on the purchase of August 4.
Four Inventory Costing Methods for Microprints Inc Requirement
1) Using the template linked below this assignment in Module 4, prepare journal entries for both Microprints and Ashley transactions assuming:
- i) Periodic system.
- ii) Perpetual system.
2) Your client has asked for advice on whether to use the perpetual or periodic inventory system. Recommend an inventory system giving reasons why it is best for your client.
Your response to Part 2 should be at least one page and must include the title and reference pages