Reference no: EM132620723
Question -
(a) Morton Supply Company uses a periodic inventory system. During September, the following transactions and events occurred.
Sept. 3 Purchased 80 backpacks at $20 each from Cole Company, terms 2/10, n/30.
Sept. 6 Received credit of $100 for the return of 5 backpacks purchased on Sept. 3 that were defective.
Sept. 9 Sold 15 backpacks for $40 each to Starr Books, terms 2/10, n/30.
Sept. 13 Paid Cole Company in full.
Instructions: Journalize the September transactions for Morton Supply Company.
(b) The following information belongs to Paradise Hardware Store:
Oct 1. Beginning inventory: 200 units at $12 = $2,400
Oct 5. Purchases made during the period: 1800 units at $12 = $21,600
Oct 15. Sales made during the period: 1200 units at $24 = $28,800
Oct 31. Ending inventory: 800 units at $12 = $9,600
Required: Make journal entries to record above transactions assuming a periodic inventory system is used by Paradise Hardware Store.
(c) State the general formula to compute the cost of goods sold under periodic inventory system.