Prepare general journal entries to record the transactions

Reference no: EM132803680

Question - Bezze Biz is the authorised dealer for heavy-duty expresso machines in the UAE. Bezze Biz buys the espresso machine for $320 each and sells them for $500 each. On 1 November 2020, five expresso machines were in the store. Below are the transactions for the month of November.

Date Transaction

November, 1 Bezze Biz purchased 20 expresso machines on credit from Ultima Pro Corporation with the term: 5/10, n/30, EXW supplier's warehouse. Bezze Biz paid freight cost of $250.

November, 6 Bezze Biz sold four expresso machines to JJ Costa Coffee on credit with this term 3/10, n/30. DDP. The freight cost of $100.

November, 8 Bezze Biz returned two of the expresso machines purchased on 1 November and paid Ultima Pro Corporation the amount due on the expresso machines retained in stock.

November, 11 JJ Costa Coffee returned one of the expresso machines sold on 6 November. The expresso machine was not defective and was returned to stock.

November, 15 Bezze Biz received payment from JJ Costa Coffee for the amount due on 6 November sale.

November, 30 A physical inventory count showed only 19 unit of expresso machines was available in the store. You decided to record the missing stock as a stock loss expense.

Required -

a) Using a perpetual inventory system, prepare general journal entries to record the transactions. Ignoring GST.

b) Explain the differences between perpetual and periodic inventory system.

Reference no: EM132803680

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