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Discussion 1.
1. How are periodic and perpetual inventory systems different?
2. Explain the differences between a service company and a merchandising company's income statement.
3. Prepare the journal entries showing (1) the sale of merchandise on credit, including credit terms, (2) the receipt of a partial return of the sale from the customer, and (3) the payment by the customer within the discount period.
Discussion 2.
1. Explain the four merchandise inventory methods.
2. Prepare 4 charts using the four different inventory methods using the following transactions:
o Purchase 25 items at $10.00
o Sell 10 items at $20.00
o Purchase 15 items at $15.00
o Sell 20 items at $20.00
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