Merchandise Inventory
(a) Differentiate between asset and expense with the help of example.
(C) Presented below is selected transactions for the M. Company during the month of September 2008. You are to pass journal entries under both (i) perpetual system (ii) periodic systems. And that credit sales have terms of 2/10, n/30 & cost of goods sold 70% of sales.
sept. 4 purchase merchandise on account from c. company at a cost tk 50000 terms FOB shipping point with 2/10, n/30.
sept. 5 paid freight charge of tk 2000 on merchandise purchase from C. Company
sept. 6 returned damage goods costing tk 7000 received from c company
sept. 8 sold merchandise to S. co. on account for tk 21000
sept. 9 purchased delivery equipment on account for tk 28000
sept. 10 goods worth tk 3000 returned by S.co. as they were not up to satisfaction.
sept. 13 paid the amount due to C. company in full
sept. 15 received balance due from s. co.
sept. 20 sold merchandise for cash tk 10000
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