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INVENTORY: January 1 – You have a beginning balance in inventory of $20,000 (5 items). During the year you purchase an additional 5 items for $5,000 each with terms of 75% down and the rest due in 1 year. You sell 8 items during the year for $7,000 each. Customers paid you 50% at the time of purchase and the remaining balance will be paid next year. Using FIFO, prepare the journal entries and t-accounts related to these transactions.Ref #Journal Entry/DescriptionDebitCreditAInventory25,000Cash18,750Accounts Payable 6,250Bought 5 items at $5,000 each?BSales?56,000?Cash28,000???Accounts Receivable28,000??Sold 8 items for $7,000??????CCOGS35,000??Inventory?35,000?Cost of 8 items sold (5 X $4,000 each + 3 X $5,000 each)????Cash???AcctRec??Invent??B28000?18750AB28000?BB2000035000C9250??A25000???45000???10000???AcctPay???Sales????COGS???6250A?56000BC35000???????January 1 – You have a beginning balance in inventory of $100,000 (10 items). During the year you purchase an additional 5 items for $12,000 each with terms of 50% down and the balance due next year. You sell 13 items during the year for $20,000 each. Customers paid you 60% at the time of purchase and the remaining balance will be paid next year. Using FIFO, prepare the journal entries and t-accounts related to these transactions.Ref #Journal Entry/DescriptionDebitCreditAInventory60,000Cash30,000Accounts Payable30,000Bought 5 items at $5,000 each?BSales?260,000?Cash156,000???Accounts Receivable104,000??Sold 13 items??????CCOGS136,000??Inventory?136,000?Cost of 13 items sold (10 X $10,000 each + 3 X $12,000 each)????Cash???AcctRec??Invent??B156000?30000AB104000?BB100000136000C126000??A 60000???160000???24000???AcctPay???Sales????COGS???30000A?260000BC136000??????? ................
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