Fundamentals of Accounting II

Question 2: Journal Entries, Discounts, Closing Entries and Income Statement- Both
Perpetual and Periodic Inventory Systems
Starbright Lighting buys lamps for $40 each and sells them for $70 each. On 1April 2013, 24 lamps
were in inventory. Starbright Lighting completed the transactions below during April.
April 3 Purchased 40 lamps on account. Terms: 2/10, n/30, EXW supplier`s warehouse.
4 Paid freight cost of $60 on 3 April purchase.
5 Sold 22 lamps on account. Terms: 3/10, n/30, DDP acquirer`s warehouse. Paid freight
cost of $30.
9 Returned 10 of the lamps purchased on 3 April and paid the amount due on the lamps
retained in stock.
10 A customer returned 3 of the lamps sold on 5 April. The lamps were not defective and
were returned to stock.
13 Purchased 20 lamps on credit. Terms: 2/10, n/30, EXW supplier`s warehouse.
14 Received payment from customer for the amount due on 5 April sale.
19 Sold 39 lamps for cash at $60 each.
20 Four of the lamps sold on 19 April were returned by the customer for a cash refund.
The lamps were not defective.
22 Paid the supplier the amount owed for the 13 April purchase.
A physical inventory count taken on 30 April 2013 showed 20 lamps in stock.
Required
A. In two columns and ignoring GST, prepare general journal entries to record the transactions
assuming:
1. a perpetual inventory system is used
2. a periodic inventory system is used. Narrations are not required.
B. Repeat requirement A but assume the business is registered for the GST.
C. Assuming Starbright closes its accounts at month-end, prepare relevant entries to close
the accounts under both inventory systems.
D. Prepare two separate income statements showi



Price: £ 99

100% Plagiarism Free & Custom Written, Tailored to your instructions

Leave your Comments


Can't read the image? click here to refresh