Question

Notes for Journal Entries:

1. Kuechly uses periodic inventory system and LIFO
2. All credit sales discounts are recorded using the net method – customers receive a 3 percent discount if they pay within 30 days.
3. Purchase discounts are recorded using the net method
4. All depreciation is straight line

Purchased 1,000 units of inventory at $150 a piece on credit from Biggie Smalls Inc. Terms are 2/10; n/60

Paid Biggie full amount owed

Sold inventory with a list price of $22,000 to M Jagger on credit

Accepted a sales return from M Jagger for half of the inventory purchased (i.e., list price of $11,000); And M Jagger paid for the remainder in cash.

Bought 1,000 units of inventory at $170 from Wolfpack Corporation with cash

Returned 100 units of inventory to Wolfpack Corporation for cash

Sold inventory to H Gilmore for $100,000 on credit

H Gilmore paid half of the amount owed

H Gilmore went bankrupt so Kuechly wrote off the balance owed by H Gilmore as uncollectible (hint: Directly write-off this Account since no allowance has been made yet).

Sold Inventory to J Lennon for $30,000 on Credit

Sold Inventory for $200,000 in Cash

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A physical count of inventory finds the 12/31/20 balance to be 500 units of inventory (the company uses LIFO – Periodic Inventory System)

What is the adjusting journal entry for this and how is COGS found?

Answer 1

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