Reference no: EM132602460

Assume that Merryland's Markets had an inventory balance of $32 570 at the close of the last accounting period. The following sales and purchase transactions are for the current period. Consider GST.

1. Purchased goods on account for $27 190.

2. Returned part of the above purchase that had an original purchase price of $1590.

3. Paid for the balance of the purchase in time to receive a discount of 2% of the purchase price.

4. Sold goods costing $24 900 for $49 820. Cash of $23 000 was received, with the balance due on account.

5. Goods sold on credit for $2023 (cost $1010) were returned.

Required

Question (a) In two columns (side-by-side), prepare general journal entries assuming:

i. a periodic inventory system is used

ii. a perpetual inventory system is used.

Question (b) Suppose that a physical count of the inventory at the end of the current period shows inventory of $30 000 to be on hand. Present the entries (if any) required under each inventory system to adjust for any discrepancy.

Comment on which system would best disclose any discrepancy.