John's specialty store uses a perpetual inveentory system. the following are some inventory transaction for the month of may 2009.
John's purchased merchandise on account for $5,000. Freight charges of $300 were paid in cash.John's returned some of the merchandise purchased in (1). The cost of the merchandise was $600 and John's account was credited by the supplier.
Merchandise costing $2,800 was sold for $5,200 in cash.
To determine the ending inventory for the month of May 2009, we need to consider the inventory transactions that occurred. In a perpetual inventory system, inventory is updated continuously with every transaction. Here's how we can calculate the ending inventory:
1. Start with the beginning inventory: If the problem doesn't provide the beginning inventory, we would need that information to accurately calculate the ending inventory.
2. Calculate the cost of merchandise purchased: John's purchased merchandise on account for $5,000. This means that $5,000 worth of inventory was added to the store's inventory. We need to add this amount to the beginning inventory.
Beginning Inventory + Purchased Merchandise = Total Inventory
3. Calculate the cost of returning merchandise: John's returned $600 worth of merchandise. This means that this amount of inventory needs to be deducted from the total inventory.
Total Inventory - Returned Merchandise = Updated Inventory
4. Calculate the cost of merchandise sold: Merchandise costing $2,800 was sold for $5,200 in cash. This means that $2,800 worth of inventory was sold. To calculate the updated inventory, we need to deduct the cost of the sold merchandise from the updated inventory.
Updated Inventory - Cost of Merchandise Sold = Ending Inventory
By following these steps and considering the relevant information provided in the problem, you can calculate the ending inventory for the month of May 2009.