Perpetual and periodic inventory systems compared
The following information is available for the Johnson Corporation for 2016:
Beginning inventory $ 25,000
Merchandise purchases ion account) 155.000
Freight charges on purchases (paid in cash) 10,000
Merchandise returned to supplier (for credit) 12,000
Ending inventory 30,000
Sales (on account) 250,000
Cost of merchandise sold 148,000
Required:
Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.