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The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic system.

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The Cloud Company employs a perpetual inventory system and the McKenzie Corporation uses a periodic system. Describe the differences between the two systems in accounting for the following events: (1) purchase of merchandise, (2) sale of merchandise, (3) return of merchandise to supplier, and (4) payment of freight charge on merchandise purchased. Indicate which accounts would be debited and credited for each event.

 
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Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1, 2013.

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The inventory of Royal Decking consisted of 5 products. Information about the Dec 31, 2018 inventory is as follow:

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The inventory of Royal Decking consisted of 5 products. Information about the Dec 31, 2018 inventory is as follow:

Product Cost Replacement Cost Selling Cost

A $55 $50 75

B 95 85 115

C 55 70 95

D 115 85 145

E 35 43 45

Selling cost consist of a sales commission equal to 10% of selling price and shipping cost equal to 5% of the cost. The normal gross profit percentage is 30% of selling price.

Required: What unit should Royal Decking use for each of its products when applying the lower cost % market (LCM) rules to unit of ending inventory. They looking for NRV(Ceiling) and NRV-NP, Market and per unit inventory value

 
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John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2018

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John’s Specialty Store uses a perpetual inventory system. The following are some inventory transactions for the month of May 2018:

  1. John’s purchased merchandise on account for $6,600. Freight charges of $1,100 were paid in cash.
  2. John’s returned some of the merchandise purchased in (1). The cost of the merchandise was $1,400 and John’s account was credited by the supplier.
  3. Merchandise costing $3,600 was sold for $6,800 in cash.

Required:

Prepare the necessary journal entries to record these transactions. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

 
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