Two Wheeler, a bike shop, opened for business on April 1. It uses a perpetual inventory system.
1. Identify and analyze each of the following transactions of Two Wheeler during the first month of business.
April 1: Purchased five units from Duhan Co. for $500 total, with terms 3/10, net 30, FOB Destination.
- Inventory 500
- Accounts Payable 500
April 10: The appropriate party paid freight of $45 in cash.
- No Change
April 15: Sold one unit for $200 total, with terms 2/10, n/30, FOB Destination. Record the sales entry only.
- Accounts Receivable 200
- Sales Revenue 200
April 15: Record the cost entry for the above noted sale. Note: use your prior knowledge to determine the cost of inventory.
- Inventory ....?
- Cost of goods sold ....?
WHAT IS THE EFFECT ON INVENTORY AND COST OF GOODS SOLD ON APRIL 15?
1. Identify and analyze each of the following transactions of Two Wheeler during the first month of business.
April 1: Purchased five units from Duhan Co. for $500 total, with terms 3/10, net 30, FOB Destination.
- Inventory 500
- Accounts Payable 500
April 10: The appropriate party paid freight of $45 in cash.
- No Change
April 15: Sold one unit for $200 total, with terms 2/10, n/30, FOB Destination. Record the sales entry only.
- Accounts Receivable 200
- Sales Revenue 200
April 15: Record the cost entry for the above noted sale. Note: use your prior knowledge to determine the cost of inventory.
- Inventory ....?
- Cost of goods sold ....?
WHAT IS THE EFFECT ON INVENTORY AND COST OF GOODS SOLD ON APRIL 15?