Question

Deshaun uses a periodic inventory system. During the current year DWE reported beginning inventory of $200,000; purchases of $2,500,000; cash sales of $1,000,000; credit sales (on account) of $3,500,000; and ending inventory of $150,000. The journal entries DWE would make during the year would include

Answer 1

Entry #	Accounts title	Debit	Credit
1	Purchases	$     2,500,000.00
	Cash (if cash purchases) /Accounts Payable (if on account purchases)		$    2,500,000.00
	(Purchases made)
2	Accounts receivables	$    3,500,000.00
	Cash	$     1,000,000.00
	Sales Revenue		$    4,500,000.00
	(Sales recorded)
3	Income Summary	$        200,000.00
	Inventory		$        200,000.00
	(To eliminate beginning inventory balance)
4	Inventory	$        150,000.00
	Income Summary		$        150,000.00
	(to record ending inventory)
5	Cost of Goods Sold	$     2,550,000.00
	Income Summary		$    2,550,000.00
	(Cost of Goods Sold recorded)
	(Beginning + Purchased - Ending)
	(200000 + 2500000 - 150000)