This example contains several journal entries used to account for transactions in a perpetual inventory system. Mulligan Imports records a purchase of $1,000 of golf clubs that are stored in inventory:
|
Debit |
Credit |
|
|
Inventory |
1,000 |
|
|
Accounts payable |
1,000 |
Mulligan records $250 of inbound freight cost associated with the delivery of golf clubs:
|
Debit |
Credit |
|
|
Inventory |
250 |
|
|
Accounts payable |
250 |
Mulligan records the sale of golf clubs from inventory for $2,000, for which the associated inventory cost is $1,200:
|
Debit |
Credit |
|
|
Accounts receivable |
2,000 |
|
|
Revenue |
2,000 |
|
|
Cost of goods sold |
1,200 |
|
|
Inventory |
1,200 |
Mulligan records a downward inventory adjustment of $500, caused by inventory theft, and detected during a cycle count:
|
Debit |
Credit |
|
|
Inventory shrinkage expense |
500 |
|
|
Inventory |
500 |