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Task:
a) In Reid Supply company
during September 2020, the following transactions and events
occurred
Sept. 4 Purchased 70
backpacks at $20 each from Hunter, terms 2/10, n/30.
Sept. 6 Received credit of
$100 for the return of 5 backpacks purchased on Sept. 4 that were defective
Sept. 9 Sold 40 backpacks for
$35 each to Oliver Books, terms 2/10, n/30.
Sept. 13 Sold 15 backpacks
for $35 each to Heller Office Supply, terms n/30
Sept. 14 Paid Hunter in full,
less discount.
Instructions Journalize the
September transactions for Reid Supply using perpetual inventory system Prepare
necessary T accounts, trail balance and an income statement for the month ended
September 2020.
b) What are the differences
between perpetual inventory system and periodic Inventory
system of recording
merchandise operations?
c) What is FOB shipping point
and FOB destination? Explain with examples.
d) What is the main
difference between preparation of income statement under perpetual
inventory system and periodic
inventory system?
Answer & Explanation
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