Question

ernabe, Inc. uses the perpetual inventory system. On September 1, 2019, the inventory account in Bernabe, Inc.'s general ledger has a balance of $50,000 (assume normal balance).

On September 19, 2019, Bernabe purchases $200,000 worth of merchandise with credit terms
1/10, net 30.

On September 21, 2019, Bernabe returns $10,000 worth of defective merchandise.  

On September 24, 2019, Bernabe sells inventory having a cost of $11,000 for a selling price of $22,000. Title of the goods transferred to the buyer on September 24, 2019.

On September 25, 2019, Bernabe pays the amount due (based on the credit terms)

Assuming these were the ONLY transactions for the month, what will be the inventory account balance in Bernabe's general ledger at September 30, 2019?

		$227,100
		$177,100
		$227,000
		$229,000
		$238,100

Answer 1

Answer :

Date	Particulars	Opening(A)	Add(B)	Less(C )	Closing (A+B-C)
	Opening Balance of Inventory	$50,000
September 19,2019	Bernabe purchases $200,000 worth of merchandise with credit terms 1/10, net 30.		$200,000
September 21, 2019	Bernabe returns $10,000 worth of defective merchandise			$10,000
September 24, 2019	Bernabe sells inventory having a cost of $11,000			$11,000
September 25, 2019	Bernabe pays the amount due (based on the credit terms)			$1,900
Total	$50,000	$200,000	$22,900	$227,100

So clsoing Inventory as on September 30,2019 is $227,100

Note :

1. on payment of dues (it is paid within credit period so discount of 1% given on net purchases( $200,000-$10,000)*1%=$1,900.This should be deducted from inventory under perpetual inventory system.

2.Purchases are added to inventory

3.Purchase returns are deducted from inventory

4.Cost of goods sold is deducted from inventory

Answer is $227,100