Transactions using a perpetual inventory system


Prepare the journal entries to record the following transactions in Hunt Ltd's records using a perpetual inventory system. (For multiple debit/credit entries, list accounts in order of magnitude.)

(a) On 2 March Hunt Ltd sold $900 000 of inventory to Streisand Ltd, terms 2/7, n/30. The cost of the inventory sold was $600 000.

(b) On 6 March Streisand Ltd returned $130 000 of the inventory purchased on 2 March because it was incorrect. The cost of the inventory returned was $80 000.

(c) On 8 March Hunt Ltd received the balance due from Streisand Ltd.

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Accounting Basics: Transactions using a perpetual inventory system
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