Reference no: EM132564416
Reid Supply is a retailer of school bags. The company is using Net approach and maintains inventory subsidiary ledger. Following transactions and events occurred during September in respect one the item backpack.
Sept. 5 Purchased 70 backpacks at $20 each from Hunter, terms 5/20, n/30. FOB destination $ 150 was paid.
Sept. 6 Return 6 backpacks purchased on Sept 5 that were found defective.
Sept. 9 Sold 40 backpacks for $30 each to Oliver Books, terms 2/10, n/20. . FOB shipping $ 100 was paid.
Sept. 13 Received 10 backpacks sold on Sep-09 not meeting customer's requirement
Sept. 20 Collect cash from Oliver books.
Sept. 22 Made payment to Hunter.
Required:
Question a. Which Inventory accounting System Company is following, how you come to know this?
Question b. Based on your answer in (a) Journalize the September transactions for Reid Supply.