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    Merchandising Inventory System Comparison

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    mama's corner
    The document compares a perpetual inventory system and a periodic inventory system. A perpetual system tracks inventory continuously by adjusting inventory accounts with each transaction. A periodic system only takes inventory counts at certain points in time, usually monthly or yearly. The document provides examples of common merchandising transactions and how they would be recorded under each system.

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    Merchandising Inventory System Comparison

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    mama's corner
    46 views5 pages
    The document compares a perpetual inventory system and a periodic inventory system. A perpetual system tracks inventory continuously by adjusting inventory accounts with each transaction. A periodic system only takes inventory counts at certain points in time, usually monthly or yearly. The document provides examples of common merchandising transactions and how they would be recorded under each system.

    Original Title

    MERCHANDISING-INVENTORY-SYSTEM-COMPARISON

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    The document compares a perpetual inventory system and a periodic inventory system. A perpetual system tracks inventory continuously by adjusting inventory accounts with each transaction. A periodic system only takes inventory counts at certain points in time, usually monthly or yearly. The document provides examples of common merchandising transactions and how they would be recorded under each system.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views5 pages

    Merchandising Inventory System Comparison

    Uploaded by

    mama's corner
    The document compares a perpetual inventory system and a periodic inventory system. A perpetual system tracks inventory continuously by adjusting inventory accounts with each transaction. A periodic system only takes inventory counts at certain points in time, usually monthly or yearly. The document provides examples of common merchandising transactions and how they would be recorded under each system.

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    © All Rights Reserved
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    MERCHANDISING INVENTORY SYSTEM COMPARISON

    Perpetual Inventory System & Periodic Inventory System


    Perpetual Inventory System Periodic Inventory System
    Purchased merchandise on account 2/10

    Merchandise Inventory Purchases


    Account Payable Account Payable

    Purchased merchandise on cash

    Merchandise Inventory Purchases


    Cash on Hand Cash on Hand

    Returned merchandise on account

    Account Payable Account Payable


    Merchandise Inventory Purchased Return and Allowances

    Returned merchandise on cash

    Cash on Hand Cash on Hand


    Merchandise Inventory Purchased Return and Allowances

    Full payment of merchandise purchased with discount

    Account Payable Account Payable


    Merchandise Inventory Purchased Discount
    Cash on Hand Cash on Hand

    Sold merchandise on account

    Account Receivable Account Receivable


    Sales Sales
    Cost of Goods Sold
    Merchandise Inventory
    Sold merchandise on cash

    Cash on Hand Cash on Hand


    Sales Sales
    Cost of Goods Sold
    Merchandise Inventory

    Sold merchandise with return

    Sales Return and Allowances Sales Return and Allowances


    Cash on Hand Cash on Hand

    Full payment of sold merchandise

    Cash on Hand Cash on Hand


    Sales Discount Sales Discount
    Account Receivable Account Receivable

    Paid Freight FOB Destination

    Freight Out Freight Out


    Cash on Hand Cash on Hand

    Paid Freight FOB Shipping Point

    Merchandise Inventory Freight In


    Cash on Hand Cash on Hand
    PERPETUAL INVENTORY SYSTEM
    PROBLEM

    Nov 1 Mr. Emanuel Pascual invested P1,000,000 in the name of the


    company.
    2 Purchased Equipment for P150,000
    3 Purchased office supplies on cash P 50,000
    4 Purchased merchandises on account to Mr. Manny Pasual,
    P280,000 term 2/10, n/30
    7 Sold Merchandise on account to Ms Queen MannyLyn amounting to
    P100,000 FOB Destination term 2/10 n/30 (cost of merchandise P70,000)
    9 Paid freight charges on Nov 7 sales , P 5,000
    12 Received credit from Mr Manny Pascual worth P20,000 from merchandise
    return
    14 Paid Mr Manny Pascual in full
    18 Received payment from Ms. Quenn MannyLy in full
    19 Paid salaries, P40,000
    20 Issue promissory note for the borrowed money amounting to P 250,000
    from Rural Bank
    22 Purchased merchandise on Mr. Hoho worth P 150,000 teems 2/10 FOB
    Shipping Point
    24 Paid freights on Mr Hoho merchandise worth P 2,000
    25 Sold merchandise worth P 170,000 (cost of good sold P 90,000)
    27 purchased merchandises for cash P 120,000
    28 Paid 50 % Mr Hoho
    29 Mr.King Emanuel Pascual withdraw P 30,000 for personal use
    30 Paid the following
    Advertising P 20,000
    Utilities P 10,000
    Rent P 30,000
    Salaries P 40,000
    30 Sold merchandise on account P 200,000 n/30, (cost of goods sold P150,000)
    PERIODIC INVENTORY SYSTEM

    PROBLEM

    November Transaction
    1 The business, KING EMANUEL ANIL PASCUAL, owned by Ms.
    MannyLyn Pascual invested P900,000.

    2 Bought office equipment for P70,000 cash.

    2 Paid rent P100,00 for the office space cash.

    3 Paid radio advertisement for the promotion of the business


    P10,000 cash.

    3 Bought office supplies on cash for P50,000.

    4 Bought merchandise on account from TCSF SUPPLY, P200,000


    terms 2/10, n/30.

    4 Sold merchandise on account P300,000 FOB Destination terms


    2/10 n/30.

    5 Paid P4,000 freight on November 4 sales

    6 Received credit from TCSF Supply for merchandise returned


    P60,000.

    11 Paid TCSF Supply

    13 Collected from November 4 customer.

    14 Bought merchandise on cash for P280,000.

    15 Paid salaries P70,000.

    16 Barrowed money from San Felipe Rural Bank, signed a


    promissory note for P240,000.
    17 Received refund from supplier on cash purchased of November
    14, 10,000.

    18 Bought merchandise from Heaven Charm P200,000 FOB


    Shipping Point, terms 2/10, n/30.

    23 Sold Merchandise for P320,000

    24 Paid freight on November 18 purchased P10,000.

    26 Bought merchandise for cash P240,000.

    27 Paid Heaven Charm on the November 18, P180,000

    28 Ms MannyLyn Pascual withdrew cash from business P40,000.

    29 Made refund to cash customer for defective merchandise


    P20,000.

    29 Sold merchandise on account, P250,000, n/30.

    30 Paid the utilities, P8.000.

    30 Paid salaries, P30,000

    30 Inventory November 30, P75,000.

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