Prepare the necessary journal entries to account for the purchases and year end adjustments of the inventory of Payson Manufacturing Company. All purchases are made on account. Payson uses the periodic inventory method.
1. Purchased 50 standard widgets for $8 each to sell at $14 per unit.
2. Purchased 15 deluxe widgets at $20 each to sell for $30 per unit.
3. At the end of the year, the standard widgets could be purchased for $9 and are selling for $15.
4. At the end of the year, the deluxe widgets could be purchased for $10 and are selling for $16 per unit. Selling costs are $4 per unit, and normal profit is $6 per unit. Inventory is 15 units.
5. At the end of the second year, standard widgets could be purchased for $6 and are selling for $8. Selling costs are $1 per widget, and normal profit is $2 per widget. Inventory is 50 units.
6. At the end of the second year, the deluxe widgets could be purchased for $9 and are selling for $20. Selling costs and normal profit remain as in (4). Inventory is 15 units.