Acc/225
Stella Deaton
06/06/2012
Week 5

5-8

Identify whether each description best applies to a periodic or a perpetual inventory system.
a. Provides more timely information to managers.—perpetual
b. Requires an adjusting entry to record inventory shrinkage. -- Perpetual
c. Markedly increased in frequency and popularity in business within the past decade. -- Periodic
d. Records cost of goods sold each time a sales transaction occurs. – Perpetual

5-9

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000 $42,500 $36,000 $78,000 $23,600
Cost of goods sold
Merchandise inventory (beginning) . . . . . . . . . . 6,000 17,050 7,500 7,000 2,560
Total cost of merchandise purchases . . . . . . . 36,000 1550 41250 32,000 5,600
Merchandise inventory (ending) . . . . . . . . . . . . 7950 (2,700) (9,000) (6,600) (2,560)
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . 34,050 15,900 39,750 32,400 5,600
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,950 26,600 3,750 45,600 18,000
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 10,650 12,150 2,600 6,000
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . $ 16,950 $15,950 $ (8,400) $43,000 $12,000

5-13

Date Periodic Perpetual

Nov. 1 Purchase 1,400 Merchandise Inventory 1,400